Implementation of Supply Chain Management Theory in

THE UNIVERSITY OF HULL

Implementation of Supply Chain Management Theory in Practice: an empirical investigation in Ireland

being a Thesis submitted for the Degree of Doctor of Philosophy (Ph.D.)

in the University of Hull

by

Edward Sweeney, B.A., B.A.I., M.Phil.

January 2013

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ABSTRACT

Since its introduction by management consultants in the early 1980s, the supply chain

management (SCM) concept has risen to prominence in both academic and commercial

circles. A substantial body of academic knowledge has been, and continues to be,

developed in the broad SCM domain. There is significant evidence that the effective

implementation of SCM can result in improvements in the performance of firms.

However, there is also evidence of a divergence between theory and practice in terms of

SCM understanding and adoption. The fundamental purpose of the research described

in this thesis is to disentangle the rhetoric from the reality in relation to SCM adoption

in practice with specific reference to the situation in Ireland.

Based on a comprehensive literature review the thesis posits a new definitional

construct for SCM – the Four Fundamentals – and sets out four research questions.

Answering these questions requires that a methodologically pluralist approach be

adopted based on the author’s multi-paradigmatic philosophical positionality. In line

with this, the empirical work comprises three main phases: focussed interviews, focus

groups and a questionnaire survey. All phases use the author’s definitional construct as

their basis.

The data collected during the various stages of the empirical research allowed this

definitional construct to be further developed. In addition, the findings suggest that,

while levels of SCM understanding are generally quite high, there is room for

improvement in relation to how this understanding is implemented in practice. In this

context, a number of critical success factors and/or barriers to implementation are

identified, as are a number of practical measures that could be implemented at

policy/supply chain/firm level to improve the level of effective SCM adoption. There

are some limitations in the author’s research and their identification allows some

potentially fruitful future research avenues to be identified.

This research contributes to the extant scholarly knowledge in the field by providing a

profile of the current level of adoption of SCM theory in practice in an Irish context, as

well as by contributing to scholarly rationalisation and understanding of the process of

realising SCM theory in a practical context.

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ACKNOWLEDGEMENTS

I have been on an enlightening learning journey over the last number of years. Whilst

the journey was often quite a lonely one as is the nature of research and scholarship, as

with anything worthwhile in life this thesis in many ways represents the product of the

endeavours of a large number of people. These individuals have helped me in large and

small ways, in some cases often unknown to themselves.

First and foremost, I wish to express deep and heartfelt gratitude to my two learned

academic mentors. Professor David Grant has been a constant source of support and

sage counsel since I first mooted the idea of undertaking a Doctorate to him back in

2006. From my first tentative steps in a coffee shop in Edinburgh through to the final

stages of this work, he has been more than just a wise mentor in terms of academic and

scholarly matters. He has guided me through various bureaucratic and administrative

obstacles and has been astonishingly kind and generous to me on a personal level.

Professor John Mangan and I had our first meaningful discussion about my proposed

research during the Logistics Research Network (LRN) conference in Hull in September

2007. That he found time for me during what was an incredibly busy period for him

personally was greatly appreciated by me at the time, and this commitment above and

beyond the call of duty has continued over the last five years. His technical and

methodological insights have always been of the highest order and have helped to shape

and structure my thinking as I progressed through the various phases of my work. David

and John – I hope that this thesis represents not just the culmination of a busy period of

Ph.D. study but also a new beginning as we continue to collaborate meaningfully over

the coming years. I was also blessed to have briefly had a scholar who I hold in the

highest esteem, Professor Alan McKinnon, as a co-supervisor during my short period on

the student register at Heriot-Watt University and I wish to convey my sincere gratitude

for his unwavering support and encouragement.

In addition to my immediate supervisory team, I am grateful to a wider network of

scholars with whom I am privileged to interact. These are too numerous to mention

individually but include my academic colleagues in the National Institute for Transport

and Logistics (NITL) and the wider Dublin Institute of Technology (DIT), elsewhere in

Ireland, in the UK (particularly my LRN friends) and internationally. Two people who

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deserve a special mention are Dr. Pietro Evangelista and Sarah Shaw, mainly for just

being there to encourage me particularly when things got tough.

My colleagues at NITL have been remarkably patient with me over the last few years,

particularly during my frequent disappearances to my Wexford bolthole. I wish to

record my particular thanks to my colleagues Pamela O’Brien and Antonio de Linares.

One could not wish for better colleagues from both professional and personal

perspectives. I also wish to thank those colleagues in the wider DIT who supported me

over the last number of years. DIT provided me with fee support during my first couple

of years and for that I am grateful. In particular, I would like to thank Declan Allen,

Head of Department of Transport Engineering, for the space and support that he has

provided to me over the last number of years.

The empirical part of this work could not have been carried out with the support of a

large number of people. My colleagues in the DIT Library and in the Irish Central

Statistical Office (CSO) were always efficient in responding to my many requests for

support and information. The empirical part of the research described in this thesis

could not have been carried out without the selfless support of my key informants: the

six interviewees in phase I, the 28 focus group participants in phase II and the 132

supply chain professionals who took the time to complete my questionnaire survey in

phase III.

There is a wider group of colleagues, friends and family who have helped me to

maintain my sanity over the last number of years. They are too numerous to mention

specifically but I am genuinely grateful to you all. There are five people who deserve a

special mention. First, my mother, Madge, has been a strong voice of encouragement to

me throughout my period of study. Mum – I always knew that you were there for me

when and if I needed you and for that I will always be grateful. Second, the continuing

support of the rest of my extended family has been specifically acknowledged in the

context of my 2007 and 2009 books but I want to make particular mention of the newest

addition since then – Laoise Cotter – I hope that you will peruse this tome when you’re

a little older! Third, my parents-in-law, Evan and Kay, who have always taken a strong

interest in my work and who encouraged me when I most needed it. I hope that they

will always be proud of their adopted son. Finally, the most important person in my life

has been a constant source of support, advice and encouragement to me in this work as

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she is in all things. Joyce – no words can express the strength of my love for you nor for

all that you have done for me over the last number of years. You have helped me in big

ways and small, in some cases without even knowing it. Big hugs to you as always.

My interest in learning and in logistics was prompted by my late father’s strong belief in

education and his professional work in the postal service. In March 2005 I promised

myself that I would complete my Ph.D. and dedicate my final thesis to him. I do so now

with a mixture and sadness and pride. Ar dheis Dé go raibh a anam dílis.

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TABLE OF CONTENTS

ABSTRACT ii ACKNOWLEDGEMENTS iii TABLE OF CONTENTS vi LIST OF FIGURES xi LIST OF TABLES xvii CHAPTER 1 – INTRODUCTION 1 1.1 Introduction 1 1.2 Background to Research 1 1.3 Context of Research 3 1.4 Research Problem and Overall Approach 4 1.5 Thesis Structure 6 1.6 Summary 7 CHAPTER 2 - LITERATURE REVIEW: UNDERSTANDING SUPPLY CHAIN MANAGEMENT 8 2.1 General Background to Literature Review 8 2.2 The Evolving Supply Chain Management Context 12

2.2.1 Introduction 12 2.2.2 Internationalisation 13 2.2.3 Vertical Disintegration 15 2.2.4 Strategic Leverage 17 2.2.5 Concluding Comments 20

2.3 Historical Evolution of SCM 20 2.3.1 Fragmentation to Integration Model 21 2.3.2 Lean/Functional to Agile/Customised Migratory Model 22 2.3.3 Lummus and Vokurka Historical Perspective 24 2.3.4 Key Lessons from SCM Historical Evolution 26

2.4 SCM Definitions 27 2.4.1 Defining SCM (Mentzer et al. 2001) 27 2.4.2 SCM: A Strategic Perspective (Bechtel and Jayaram, 1997) 28 2.4.3 CSCMP Definition 29 2.4.4 Key Lessons from SCM Definitions 30

2.5 Paradigm Shifts 30 2.5.1 Christopher’s Paradigm Shifts 30 2.5.2 Conventional Management and SCM (Storey et al., 2006) 31 2.5.3 Supply Chain “Mega-Trends” (Bowersox et al., 2000) 32 2.5.4 Key Lessons from Paradigm Shifts 32

2.6 Development of SCM Theory 33 2.6.1 Background 33 2.6.2 Theories of SCM and Logistics 34 2.6.3 SCM and the Value Chain 35 2.6.4 Relating SCM to Other Theories 37 2.6.5 Some Concluding Comments 37

2.7 Towards a Unified Definition of SCM: the Four Fundamentals 38

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2.8 Fundamental One: Setting SCM Objectives 41 2.8.1 The Role of Objectives 41 2.8.2 Customer Service 42 2.8.3 Total Supply Chain Investment and Costs 44 2.8.4 The Service/Cost Conundrum 47 2.8.5 Fundamental One: Summary and Some Concluding Points 48

2.9 Fundamental Two: SCM Philosophy 49 2.9.1 Supply Chain Integration 50 2.9.2 Internal Chain Integration 51 2.9.3 External Chain Integration 54 2.9.4 Performance Measurement 56 2.9.5 Fundamental Two: Summary and Some Concluding Points 61

2.10 Fundamental Three: Managing the Flows 62 2.10.1 Supply Chain Flows 62 2.10.2 Managing Material Flows 63 2.10.3 Managing Money Flows 66 2.10.4 Managing Information Flows 67 2.10.5 Fundamental Three: Summary and Some Concluding Points 68

2.11 Fundamental Four: Supply Chain Relationships 69 2.11.1 Supply Chain Relationship Management 69 2.11.2 Types of Relationships 70 2.11.3 The Impact of Vertical Disintegration 70 2.11.4 Strategic Partnering 71 2.11.5 The People Dimension 72 2.11.6 Fundamental Four: Summary and Some Concluding Points 73

2.12 Unified Definition of SCM: Some Concluding Points 74 2.13 SCM: The Role of Logistics and Other Antecedents/Perspectives 76

2.13.1 Logistics and the Four Fundamentals of SCM 76 2.13.2 Other Antecedents and Perspectives 76 2.13.3 Summary and Some Concluding Points 78

2.14 Reflection on the Four Fundamentals: From a Unified Definition Towards a Unified Theory of SCM? 78

2.14.1 Background 78 2.14.2 Lummus and Vokurka Practical Guidelines 79 2.14.3 Burgess et al. Constructs of SCM 80 2.14.4 Storey et al. Idealised Schemas 82 2.14.5 Summary and Some Concluding Points 83

2.15 Research Questions 83 2.15.1 Introduction and Theoretical Context 83 2.15.2 Divergence of Theory and Practice 84 2.15.3 The Forrester Forecast – Rhetoric or Reality? 85 2.15.4 Development of Research Questions 88

2.16 Summary and Some Concluding Comments 89 CHAPTER 3 - RESEARCH METHODOLOGY 91 3.1 Introduction 91 3.2 Research Philosophy 92

3.2.1 Ontology and Epistemology 92 3.2.2 Paradigms 93 3.2.3 The Positivist Paradigm 95 3.2.4 The Interpretivist Paradigm 95 3.2.5 Positionality - The “Paradigm Wars” 96

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3.2.6 Towards a Multi-Paradigmatic Position? 99 3.2.7 Paradigmatic Preferences and Positionality in this Research 101

3.3 Research Methodology 103 3.3.1 Research Approaches: Induction and Deduction 104 3.3.2 Quantitative versus Qualitative Research 104 3.3.3 Combining Qualitative and Quantitative Strategies 106 3.3.4 Case Studies 107 3.3.5 Action Research 108 3.3.6 Grounded Theory 109 3.3.7 Methodology in this Research: Methodological Pluralism 110

3.4 Research Methods and Techniques 112 3.4.1 Surveys 112 3.4.2 Focussed Interviews 113 3.4.3 Focus Groups 114 3.4.4 Ethnography and Participant Observation 116 3.4.5 Research Methods and Techniques Used in this Research 117

3.5 Overall Research Design 120 3.6 Phase I: Focussed Interviews 122

3.6.1 Background 122 3.6.2 Data Collection 123

3.7 Phase II: Focus Groups 125 3.7.1 Background 125 3.7.2 Group Composition 127 3.7.3 Group Size 130 3.7.4 Summary of Composition and Size of Focus Groups 131 3.7.5 Conducting the Focus Groups 133 3.7.6 Analysing the Focus Group Data 137

3.8 Phase III: Survey Questionnaire 139 3.8.1 Background 139 3.8.2 Initial Design and Planning 141 3.8.3 Questionnaire Design Process 153 3.8.4 Identification of Data Requirements 155 3.8.5 Determination of Survey Question Wording 156 3.8.6 Data Analysis Considerations 159 3.8.7 Draft Questionnaire Pre-testing 162 3.8.8 Final Design and Planning 163

3.9 Summary and Some Concluding Points 165 CHAPTER 4 - PHASE I: FOCUSSED INTERVIEWS 167 4.1 Background and Introduction 167 4.2 Evolution and Definitions of SCM and Logistics 168 4.3 SCM and Logistics Definitions in Practice: analysis of focussed interview data 169 4.4 Discussion of Results 171

4.4.1 Supply Chain 171 4.4.2 Logistics 173 4.4.3 The Relationship Between the Supply Chain and Logistics 174 4.4.4 Other Issues Raised 175 4.4.5 Comparison with Lummus et al. (2001) 175 4.4.6 Interview Findings and the Four Fundamentals of SCM 176 4.4.7 Towards a Model of the Relationship Between SCM and Logistics 178 4.4.8 Limitations and Suggestions for Further Work 180

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4.5 Concluding Comments 182 CHAPTER 5 - PHASE II: FOCUS GROUPS 184 5.1 Background 184 5.2 Focus Group Findings 185

5.2.1 Focus Group 1 (FG1) 186 5.2.2 Focus Group 2 (FG2) 190 5.2.3 Focus Group 3 (FG3) 194

5.3 Participant Feedback 199 5.4 Analysis and Discussion 199

5.4.1 Qualitative Criteria: Reflection and Evaluation 199 5.4.2 Using Focus Group Data to Answer RQ1 203 5.4.3 Four Fundamentals Construct Refinement 207

5.5 Concluding Comments 213 CHAPTER 6 - PHASE III: QUESTIONNAIRE SURVEY 215 6.1 Background 215 6.2 Data Collection 216 6.3 Data Presentation 219

6.3.1 Questionnaire Section 1: Background 219 6.3.2 Questionnaire Section 2: SCM Objectives (Fundamental One) 221 6.3.3 Questionnaire Section 3: Supply Chain Integration (Fundamental Two) 224 6.3.4 Questionnaire Section 4: Supply Chain Flow Management (Fundamental Three) 226 6.3.5 Questionnaire Section 5: Supply Chain Relationships (Fundamental Four) 227 6.3.6 Questionnaire Section 6: Supply Chain Improvement 228 6.3.7 Respondent Information 229 6.3.8 Reflection and Summary 231

6.4 Data Analysis 231 6.4.1 Questionnaire Section 1: Background 231 6.4.2 Questionnaire Section 2: SCM Objectives (Fundamental One) 245 6.4.3 Questionnaire Section 3: Supply Chain Integration (Fundamental Two) 256 6.4.4 Questionnaire Section 4: Supply Chain Flow Management (Fundamental Three) 260 6.4.5 Questionnaire Section 5: Supply Chain Relationships (Fundamental Four) 266 6.4.6 Questionnaire Section 6: Supply Chain Improvement 270 6.4.7 Relationships Across Sections 280 6.4.8 The Contingency Model 286 6.4.9 Questionnaire Data to Answer RQs 291

6.5 Summary/Conclusion 296 CHAPTER 7 - DISCUSSION OF FINDINGS 297 7.1 Introduction 297 7.2 Integrated Discussion of Empirical Findings 297

7.2.1 RQ1 - What is the current level of understanding of SCM in practice? 297 7.2.2 RQ2 - What is the current level of adoption of SCM? 300 7.2.3 RQ3 - What are the critical success factors and/or inhibitors to success in putting SCM theory into practice? 303 7.2.4 RQ4 - What practical measures could be implemented at policy/supply chain/firm level to improve the level of effective SCM adoption? 309

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7.3 Integrating Empirical Findings with the Literature 311 7.3.1 Empirical Findings and the Four Fundamentals 311 7.3.2 Empirical Findings and the Literature Review 315

7.4 Summary and Conclusion 319 CHAPTER 8 - GENERAL CONCLUSIONS, IMPLCATIONS AND SUGGESTIONS FOR FURTHER WORK 322 8.1 Introduction 322 8.2 Contribution of the Research 322

8.2.1 Knowledge Contribution 322 8.2.2 Methodological Contribution 325

8.3 Implications 329 8.3.1 Managerial Implications 329 8.3.2 Policy Implications 332

8.4 Research Limitations and Suggestions for Further Work 333 REFERENCES 336 APPENDICES 365

APPENDIX 1: SELECTED SCM LITERATURE

APPENDIX 2: SCOR MODEL

APPENDIX 3: SCM DEFINITIONS

APPENDIX 4: SUPPLY CHAIN SCHOOLS OF THOUGHT

APPENDIX 5: THEORIES OF THE FIRM – TOWARDS A UNIFIED THEORY OF

LOGISTICS

APPENDIX 6: SUPPLY CHAIN 2000 FRAMEWORK – SIX COMPETENCIES

APPENDIX 7: REVIEW OF PREVIOUS EMPIRICAL STUDIES

APPENDIX 8: SUMMARY OF PAPER USING FOCUS GROUP METHOD IN

LOGISTICS/SCM

APPENDIX 9: FOCUS GROUP PARTICIPANTS AND COMPANY PROFILES

APPENDIX 10: IDENTIFICATION OF QUESTIONNAIRE DATA

REQUIREMENTS

APPENDIX 11: FINAL QUESTIONNAIRE

APPENDIX 12: QUESTIONNAIRE COVER LETTER

APPENDIX 13: ANALYSIS OF RESPONDENT DEMOGRAPHIC DATA

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LIST OF FIGURES

Figure 1.1: Structure of Thesis 6

Figure 2.1: Theoretical Framework for SCM Research 10

Figure 2.2: Structure of Chapter 2 11

Figure 2.3: The Strategic Alignment Model 19

Figure 2.4: SCM Evolution 21

Figure 2.5: Performance/Capability Continuum 27

Figure 2.6: Framework for Literature Classification 33

Figure 2.7: Porter’s Value Chain 36

Figure 2.8: The Four Fundamentals of SCM 41

Figure 2.9: Fundamental One of SCM 41

Figure 2.10: Customer Service in Integrated SCM Performance Specification 44

Figure 2.11: Improved Financial Performance Measures the

Effectiveness of SCM 47

Figure 2.12: Achieving Competitive Advantage through Integrated SCM 49

Figure 2.13: Fundamental Two of SCM 50

Figure 2.14: The Internal Supply Chain 52

Figure 2.15: Integrating the Internal Supply Chain 52

Figure 2.16: The External Supply Chain 54

Figure 2.17: Arcs of Integration 56

Figure 2.18: Phases of Development of Supply Chain Performance Measurement 58

Figure 2.19: Supply Chain Performance Metrics Framework 61

Figure 2.20: Fundamental Three of SCM 62

Figure 2.21: Perspectives on SCM versus Logistics 65

Figure 2.22: The Working Capital Cycle 66

Figure 2.23: Fundamental Four of SCM 69

Figure 2.24: Categories of Customer/Supplier Relationship 70

Figure 2.25: Components of SCM 72

Figure 2.26: Themes and Sub-themes in SCM Definitions 74

Figure 2.27: The Role of Marketing in SCM 77

Figure 2.28: A Hierarchy of Research Focus 78

Figure 2.29: Development of Research Questions 89


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Figure 3.2: Four Paradigms for the Analysis of Social Theory 94

Figure 3.3: Inductive and Deductive Research Approaches 104

Figure 3.4: Action Research “Spiral” 109

Figure 3.5: Overall Research Design 121

Figure 3.6: Detailed Focus Group Design Process 126

Figure 3.7: Factors Influencing Focus Group Effectiveness 129

Figure 3.8: The Effect of Group Size on Quality and Controllability 130

Figure 3.9: Focus Group Sectoral Breakdown 131

Figure 3.10: Company Overlap across Focus Groups 132

Figure 3.11: Nationality of Focus Group Participants 132

Figure 3.12: Gender of Focus Group Participants 132

Figure 3.13: Main Stages in Carrying Out a Questionnaire Survey and

Structure of Section 3.8 140

Figure 3.14: Empirical Studies by Sector 143

Figure 3.15: Number of Firms in the Population by NACE Category 148

Figure 3.16: NACE Category G – Breakdown of Population by Level 2 NACE

Divisions 149

Figure 3.17: NACE Category C – Breakdown of Population by Level 2 NACE

Divisions 150

Figure 3.18: Design Process for Survey Questions 154

Figure 3.19: Questionnaire Refinement Process 163


Figure 4.2: Transcript Analysis Process 171

Figure 4.3: The SCM and Logistics Domains 178


Figure 5.2: Summary of Feedback from Focus Group 1 187



Figure 5.5: Testing for Data Saturation 201

Figure 5.6: New Words or Phrases in Focus Group Sessions 201

Figure 5.7: Overview of the Four Fundamentals 204

Figure 5.8: Four Fundamentals Refinement 208


Figure 6.2: Survey Response Pattern 217

Figure 6.3: Responses by Sector 218

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Figure 6.4: Relationship Between SCM and Logistics 220

Figure 6.5: Language and Terminology Used to Define SCM 220

Figure 6.6: Value of Single-Sentence Definitions of SCM 220

Figure 6.7: Formulation of Specific SCM Objectives 221

Figure 6.8: Focus of SCM Objectives 221

Figure 6.9: Use of Customer Service Audits 222

Figure 6.10: Elements of Customer Service Measured 222

Figure 6.11: Customer Service and SCM/Supply Chain Design 223

Figure 6.12: Measuring “Total Supply Chain Cost” 223

Figure 6.13: Supply Chain Costing Methodologies 223

Figure 6.14: The Service/Cost Conundrum 224

Figure 6.15: Importance of Integration in SCM 224

Figure 6.16: Extent of Internal Integration 225

Figure 6.17: Extent of Integration with Customers 226

Figure 6.18: Extent of Integration with Suppliers 226

Figure 6.19: Flow Management 227

Figure 6.20: ICT Tools Used 227

Figure 6.21: Nature and Extent of Relationships 228

Figure 6.22: Major Supply Chain Improvement Initiatives 228

Figure 6.23: Size of Respondents’ Firms 229

Figure 6.24: Ownership of Respondents’ Firms 230

Figure 6.25: Headquarters of Multinational Firms 230

Figure 6.26: Respondent Professional Background 230

Figure 6.27: Words Used to Define “Supply Chain” 232

Figure 6.28: Supply Chain Definitions 233

Figure 6.29: Words Used to Define “Supply Chain Management” 234

Figure 6.30: Supply Chain Management Definitions 235

Figure 6.31: Words Used to define “Logistics” 236

Figure 6.32: Logistics Definitions 237

Figure 6.33: Relationships Between SCM and Logistics by Respondent

Background 238

Figure 6.34: Factor Map – Relationships Between SCM and Logistics by

Respondent Background 238

Figure 6.35: Value of Single-Sentence Definitions by Sector 240

Figure 6.36: Value of Single-Sentence Definitions by Firm Size 241

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Figure 6.37: Factor Map – Value of Single-Sentence Definitions by Firm Size 241

Figure 6.38: Value of Single-Sentence Definitions by Firm Ownership 242

Figure 6.39: Factor Map – Value of Single-Sentence Definitions by Ownership 242

Figure 6.40: Value of Single-Sentence Definitions by Respondent Background 243

Figure 6.41: Factor Map – Value of Single-Sentence Definitions by Ownership 243

Figure 6.42: Formulation of SCM Objectives by Firm Size 246

Figure 6.43: Factor Map – Formulation of SCM Objectives by Firm Size 246

Figure 6.44: Formulation of SCM Objectives by Firm Ownership 246

Figure 6.45: Factor Map – Formulation of SCM Objectives by Firm Ownership 247

Figure 6.46: Formulation of SCM Objectives by Respondent Background 247

Figure 6.47: Factor Map – Formulation of SCM Objectives by Respondent

Background 248

Figure 6.48: Use of Customer Service Audits by Firm Size 249

Figure 6.49: Factor Map – Use of Customer Service Surveys by Firm Size 249

Figure 6.50: Role of Customer Service in SCM/Supply Chain Design by

Firm Size 250

Figure 6.51: Factor Map – the Role of Customer Service in SCM/Supply

Chain Design by Firm Size 250

Figure 6.52: Measurement of “Total Supply Chain Cost” by Firm Size 252

Figure 6.53: Factor Map - Measurement of “Total Supply Chain Cost” by

Firm Size 252


Figure 6.55: Factor Map – Measurement of “Total Supply Chain Cost” by

Firm Ownership 252


Figure 6.57: Factor Map – Measurement of “Total Supply Chain Cost” by


Figure 6.58: Role of Integration in SCM by Sector 257

Figure 6.59: Role of Integration in SCM by Firm Size 258

Figure 6.60: Factor Map – Role of Integration in SCM by Firm Size 258

Figure 6.61: Management of Material Flows by Sector 261

Figure 6.62: Use of ICT Tools by Sector 263

Figure 6.63: Use of ICT Tools by Firm Size 263

Figure 6.64: Factor Map – Use of ICT Tools by Firm Size 264

Figure 6.65: Use of ICT Tools by Firm Ownership 264

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Figure 6.66: Factor Map – Use of ICT Tools by Firm Ownership 265

Figure 6.67: Relationships with Customers by Firm Size 267

Figure 6.68: Factor Map – Relationships with Customers by Firm Size 268

Figure 6.69: Relationships with Customers by Firm Ownership 268

Figure 6.70: Factor Map – Relationships with Customers by Firm Ownership 268

Figure 6.71: Supply Chain Improvement Initiatives in the Last Two Years

by Sector 271


by Firm Size 272

Figure 6.73: Factor Map – Supply Chain Improvement Initiatives in the Last

Two Years by Firm Size 272


by Firm Ownership 272

Figure 6.75: Factor Map – Supply Chain Improvement Initiatives in the Last

Two Years by Firm Ownership 273

Figure 6.76: Supply Chain Improvement Initiatives in the Last Two Years by


Figure 6.77: Types of Improvement Initiatives Implemented in the Last

Two Years 274

Figure 6.78: Supply Chain Improvement Initiatives in the Next Two Years

by Firm Size 275

Figure 6.79: Factor Map – Supply Chain Improvement Initiatives in the Next

Two Years by Firm Size 275

Figure 6.80: Supply Chain Improvement Initiatives in the Next Two Years

by Firm Ownership 276

Figure 6.81: Factor Map – Supply Chain Improvement Initiatives in the Next

Two Years by Firm Ownership 276

Figure 6.82: Supply Chain Improvement Initiatives in the Next Two Years by


Figure 6.83: Types of Improvement Initiatives Planned in the Next Two Years 278

Figure 6.84: Possible Policy Initiatives 279

Figure 6.85: Internal Integration and Information Flow Management 281

Figure 6.86: Factor Map – Internal Integration and Information Flow

Management 281

Figure 6.87: Integration with Customers and Information Flow Management 282

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Figure 6.88: Integration with Suppliers and Information Flow Management 282

Figure 6.89: Factor Map – Integration with Customers and Information Flow

Management 283

Figure 6.90: Factor Map – Integration with Suppliers and Information Flow

Management 283

Figure 6.91: Internal Integration and Relationships 284

Figure 6.92: Integration and Relationships with Customers 284

Figure 6.93: Integration and Relationships with Suppliers 285

Figure 6.94: Factor Map – Internal Integration and Relationships 285

Figure 6.95: Factor Map – Integration and Relationships with Customers 286

Figure 6.96: Factor Map – Integration and Relationships with Suppliers 286

Figure 6.97: Overall Contingency Model 287

Figure 6.98: Demographic Data Contingency Model 288

Figure 6.99: Contingency Model (within and between variable groups) 290

Figure 7.1: Critical Success Factors and/or Inhibitors to Success 303

Figure 7.2: Critical Success Factors and the Strategic Alignment Model 309

Figure 7.3: Evolution of Four Fundamentals Concept 313

Figure 8.1: Complementarity of Methods 327

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LIST OF TABLES

Table 2.1: Migration from Lean/Functional to Agile/Customised Supply Chains 22

Table 2.2: Conventional Management and SCM – core concepts 31

Table 2.3: Mega-trends in Supply Chain Logistics 32

Table 2.4: Elements of Customer Service 43

Table 2.5: Stock and Boyer (2009) and the Four Fundamentals 75

Table 2.6: Guidelines on Good SCM Practice 79

Table 2.7: Seven Constructs of SCM 81

Table 2.8: Idealised SCM Characteristics 82

Table 2.9: Focus of SCM Empirical Research 87

Table 3.1: Characteristics of Positivism and Interpretivism 97

Table 3.2: Overall Research Questions 120

Table 3.3: Characteristics of Homogeneous and Heterogeneous Focus Groups 128

Table 3.4: Focus Group Execution 134

Table 3.5: Overview of Focus Group Presentation of the Four Fundamentals 135

Table 3.6: Skills and Roles of Focus Group Facilitator/Moderator 136

Table 3.7: Register of Companies at the End of 2009 142

Table 3.8: NACE Rev. 2 Industry Category Disaggregation 144

Table 3.9: NACE Top-Level Categories Included in and Excluded from

the Survey 145

Table 3.10: Number of Firms in the Targeted NACE Top-Level Categories 147

Table 3.11: Number of Firms in the Population by NACE Category 147

Table 3.12: NACE Category G – Breakdown of Population by Level 2

NACE Divisions 149

Table 3.13: NACE Category C – Breakdown of Population by Level 2

NACE Divisions 150

Table 3.14: Sampling Strata Based on NACE Categories and Divisions 153

Table 3.15: Survey Data Requirements in the Form of Detailed Questions 157

Table 3.16: EU Definition of Firm Size 159

Table 4.1: Practitioner Definitions 172

Table 4.2 Interview Findings and the Four Fundamentals 177

Table 5.1: Fundamental One and Focus Group Responses 205

Table 5.2: Fundamental Two and Focus Group Responses 206

Table 5.3: Fundamental Three and Focus Group Responses 206

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Table 5.4: Fundamental Four and Focus Group Responses 207

Table 6.1: Final Sample 216

Table 6.2: Emails Returned Undelivered 217

Table 6.3: Response Rates by Sector 219

Table 6.4: Relative Importance of Customer Service, Price and Product Quality 222

Table 6.5: Importance of Different Levels of Integration 225

Table 6.6: Questionnaire Section 1 – Significance of Dependencies 244


Table 6.8: Internal and External Integration 259


Table 6.10: Dependence of Material and Financial Flows on Information Flows 265


Table 6.12: Internal and External Relationships 269



Table 6.15: SCM Adoption 293

Table 7.1: Possible Measures to Improve SCM Adoption 310

1

CHAPTER 1

INTRODUCTION

1.1 Introduction

This introductory chapter provides some general background to the research carried out

by the author (section 1.2) before going on to explain the context (Ireland) in which the

empirical work was carried out (section 1.3). The chapter then explains the specific

problem that provides the focus for the author’s work and justifies the work as

meaningful research, and allows the author to describe the overall approach adopted

(section 1.4). This leads to a description of the rationale for the overall structure of this

thesis, as well as an explanation of the main purpose of each of the thesis’ constituent

chapters (section 1.5). The chapter then summarises some of the main issues by way of

conclusion (section 1.6).

1.2 Background to Research

Since its introduction by management consultants in the early 1980s, the supply chain

management (SCM) concept has risen to prominence in both academic and commercial

circles. A substantial body of academic knowledge has been, and continues to be,

developed in the broad SCM domain. There is significant evidence that the effective

implementation of SCM can result in improvements in the performance of firms. For

example, on the basis of a study of 196 firms, Li et al. (2006) concluded that higher

levels of SCM practice “can lead to enhanced competitive advantage and improved

organizational performance” (p. 107). Similarly, the work of Frohlich and Westbrook

(2001) based on a survey of 322 global manufacturers strongly supported the hypothesis

that companies with the “greatest extent of supplier and customer integration will have

the largest rates of performance improvement” (p. 193). This is significant given the

centrality of integration in SCM philosophy.

However, Fabbe-Costes and Jahre (2008), based on a systematic review of 38 papers on

the subject of supply chain integration (SCI) note that:

2

Even though half of the papers of our total sample conclude that SCI has a

positive effect on performance, the variety of empirical bases and the research

design of the studies suggest that caution is advisable (p. 140).

In a similar vein, Storey et al. (2006) assert that, “while there is an emerging body of

theory which ostensibly offers a relatively coherent and compelling prescriptive

narrative, predominant practice is at considerable odds with this conceptualisation” (p.

755). Carter and Narasimhan (1994) noted that the incorporation of SCM into the

overall business planning process is not widely practiced. As noted earlier, the concept

of integration lies at the heart of SCM philosophy. However, there is significant

evidence of a divergence between theory and practice in this core area. For example,

Storey et al. (2006) recognise that supply chain theory suggests that the chain should be

managed from end-to-end but note that, “our research found very few examples of this”

(p. 763). The work of Fabbe-Costes and Jahre (2007) concluded that, “at this point in

time it seems that we can confirm that integration is more rhetoric than reality, that it

might be more difficult in practice than in theory” (p. 848). Their more recent work

(Fabbe-Costes and Jahre, 2008) reinforces this view. A number of other authors have

raised serious questions about the real impact of SCM in practice. For example, Cousins

et al. (2006) suggested that:

SCM still appears to suffer from an underlying frustration or perception of being

largely ignored; practitioners feel they have a great deal of value to add, but the

organisation is not concerned with them (p. 699).

In short, there is evidence to suggest that there are – as Storey et al. (2006) put it –

“substantial gaps between theory and practice” (p. 769). This raises important questions

concerning the real impact of SCM theory in practice. The fundamental purpose of the

research described in this thesis is to disentangle the rhetoric from the reality in relation

to SCM adoption in practice with specific reference to the situation in Ireland.

SCM is not new. The term may be relatively new, but supply chains have existed for a

very long time – in fact they have probably always existed! For example, Forrester’s

often cited article from the Harvard Business Review in 1958 (Forrester, 1958) stated

that:

Management is on the verge of a major breakthrough in understanding how

industrial company success depends on the interactions between the flows of

information, materials, money, manpower, and capital equipment. The way these

five flow systems interlock to amplify one another and to cause change and

3

fluctuation will form the basis for anticipating the effects of decisions, policies,

organisational forms, and investment choices (p. 37).

If, as Forrester suggested, management was on “the verge of a major breakthrough”

over half a century ago, it seems pertinent to raise questions concerning how this

breakthrough – mainly in relation to managing relationships between supply chain

companies – has impacted on companies in reality. In fact, over 40 years after

Forrester’s article first appeared, Mentzer et al. (2001, p. 20), in concluding their paper,

asked the question – “how prevalent is SCM?” More recently, Kotzab et al. (2011, p.

233) noted that the general agreement among researchers in relation to the positive

effects of SCM on an organisation’s performance “lacks empirical support as most

research provides mostly anecdotal evidence” and that “there is a dearth of evidence in

relation to the extent to which SCM – as defined in the academic literature – is

implemented or even understood in practice”. The research described in this thesis

attempts to provide some insights into this key question and the issues that it raises,

specifically in an Irish context.

1.3 Context of Research

Ireland is a small, open, trade-dependent nation and between the mid-1990s and 2007

was one of the fastest growing economies in the developed world. During that period of

unprecedented economic growth the level of Irish real gross domestic product (GDP)

almost doubled in size and the Irish economy was transformed from its historical

agrarian and traditional manufacturing base to one increasingly based on the hi-tech and

internationally traded services sectors (ESRI, 2005). These “Celtic Tiger” years are

reflected in, for example, headlines in The Economist such as: ‘Ireland: Europe’s tiger

economy’ and ‘Ireland shines’ (Economist, 1997); ‘Tiger, tiger, burning bright’; and,

‘Lessons from the Irish miracle’ (Economist, 2004). Since 2007 there has been a serious

contraction in the size of the economy with crises in the banking and property sectors –

as well as high levels of government, corporate and personal debt – contributing to one

of the deepest recessionary periods ever seen in any modern economy (ESRI, 2011).

This is reflected in more recent headlines in The Economist with a somewhat different

tenor such as: ‘The emerald shines no longer: Irish eyes are not smiling’ (Economist,

2010); ‘The many stages of grief’ (Economist, 2011); and, ‘The muck of the Irish’

(Economist, 2012).

4

Nonetheless, Ireland’s economy continues to be one of the most open in the world. The

high share of combined imports and exports in GDP (for example, over 180% in 2010)

and the continuing high levels of foreign direct investment (FDI) capital inflows are

illustrations of this openness (ESRI, 2011). In absolute terms, the latter are by far the

largest in the European Union (EU) in per capita terms. Throughout this difficult

economic period the export sector proved remarkably resilient. For example, according

to the Economic and Social Research Institute (ESRI), merchandise exports increased

by 6% in value in 2010 (ESRI, 2011). Government policy has a strong emphasis on

export-led growth as the key to economic recovery (see, for example, DJEI, 2011). In

this context, logistics and SCM are critically important.

A number of other issues combine to make logistics and SCM particularly important in

an Irish context (see for example: Forfas, 1995; Sweeney et al., 2008). The country’s

relatively peripheral location, and the fact that it is an island, results in transportation

costs for companies based in Ireland being higher than those in more favourable

locations. Furthermore, the corporate taxation regime (in particular the 12.5% tax rate

on service businesses) makes the option of companies establishing business units (profit

centres) in Ireland with responsibility for the management of supply chain activities

attractive. One of the challenges in this scenario is the ability of Irish businesses to

manage increasingly complex and global supply chain configurations. Excellence in

SCM can offset the physical disadvantage posed by Ireland’s geographic location by

securing savings elsewhere in the wider supply chain, as well as by generating

improvements in customer service levels.

1.4 Research Problem and Overall Approach

As noted in section 1.2, the fundamental purpose of the research described in this thesis

is to disentangle the rhetoric from the reality in relation to SCM adoption in practice

with specific reference to the situation in Ireland. With this in mind, the author’s work

comprised two main components. The first was a comprehensive literature review in the

SCM domain with specific reference to the divergence between theory and practice.

This informed the development of a set of four research questions (RQs) to be explored

specifically in an Irish context:

RQ1 – What is the current level of understanding of SCM in practice?

5

RQ2 – What is the current level of adoption of SCM?

RQ3 – What are the critical success factors and/or inhibitors to success in putting

SCM theory into practice?

RQ4 – What practical measures could be implemented at policy/supply chain/firm

level to improve the level of effective SCM adoption?

As noted earlier, the literature suggests that the extent to which SCM is implemented in

practice is unclear. Furthermore, there is evidence of a lack of clarity and consistency in

terms of how SCM is defined and understood. RQ1 aims to address this issue by

exploring the level of SCM understanding in practice. It is the author’s contention that

effective implementation of SCM is predicated upon such an understanding – i.e.

something that is not well understood can not easily be implemented. Hence, before

exploring the extent to which SCM is being adopted – the focus of RQ2 – there is a

need for clarity in relation to the extent to which the concept is understood, i.e. the focus

of RQ1. The factors upon which SCM adoption depends is then the focus of RQ3 with

its emphasis on the identification of critical success factors and/or inhibitors to success

in putting SCM theory into practice. This is the key question that needs to be answered

if the divergence between theory and practice identified in the extant literature is to be

better understood. Based on this, RQ4 goes on to identify measures that could be

implemented to improve the level of SCM adoption. It is intended that this will focus on

possible policy-level interventions, as well as on possible supply chain and firm level

measures.

The second component of the author’s work – the empirical research – aims to generate

insights into these questions. The research design is based on the concept of

methodological pluralism and comprises three main phases: (i) focussed interviews; (ii)

focus groups; and, (iii) a questionnaire survey. While each phase of the work

specifically aims to address one or more specific questions, it is the effective use of a

range of appropriate methods as part of an overall integrated research design that is of

most importance. Many scholars have discussed the lack of a robust theoretical

foundation in the SCM field and several attempts have been made to address this

perceived challenge with varying degrees of success. At present there is certainly no

universally agreed upon unified theory of SCM. For example, Halldorsson et al. (2007)

concluded that “the main message in this paper is that there is no such thing as a

6

‘unified theory of SCM’” (p. 292). The adoption of combinatory methodological

approaches by the author is aimed at ensuring that the empirical work carried out:

1. Is of practical value to practitioners and policy-makers by providing a detailed

understanding of the current SCM landscape in Ireland; and,

2. Contributes in a meaningful way to the further development of critical SCM

theory across the range of domains addressed.

Thus, this research does not aim to be simply an exercise in fact-finding in an Irish

context; it also seeks to support the building and testing of SCM theory with Ireland

merely serving as an appropriate context for this work.

1.5 Thesis Structure

The overall structure of this thesis is illustrated in Figure 1.1 (below).

Figure 1.1: Structure of Thesis

Following this introduction, Chapter 2 goes on to describe the author’s comprehensive

literature review. The initial part of this review highlights the importance of agreed

upon definitional constructs and the author posits his own definition – the Four

Fundamentals – based on the extant literature reviewed. The literature review also

informed the development of the four main RQs (see section 1.4) that provide a focus

for the author’s empirical work.

7

Chapter 3 then discusses research in the SCM and logistics domains from

philosophical and methodological perspectives, as well as in terms of a range of data

collection and analysis methods and techniques. This leads to the development of the

author’s empirical research design based around its three main constituent phases. The

remainder of the chapter explains the design of each of these phases in some detail

Chapters 4, 5 and 6 go on to discuss the data collection and analysis through each of

the three main phases of the empirical research – i.e. focussed interviews, focus groups

and the questionnaire survey, respectively. In each case, the data that were collected are

presented and insights are provided into the various RQs based on a detailed analysis of

these data.

Chapter 7 integrates the work described in the previous chapters. It does so by firstly

discussing the findings from the three phases of the author’s empirical research in a

holistic and integrated manner. It goes on to relate these findings to the existing body of

scholarly knowledge using the author’s Four Fundamentals construct and other relevant

themes from the literature review in Chapter 2 as a basis.

Chapter 8 summarises the main contributions of the research described in this thesis,

both in terms of the scholarly body of knowledge and from a methodological

perspective. It goes on to identify some key implications for both supply chain

practitioners and policy makers. The limitations of the work are also highlighted,

leading directly to a number of suggestions for future potentially fruitful research

avenues in the field.

1.6 Summary

This chapter has laid the foundations for this thesis. It has introduced the research

background and context and set out the research problem and questions to be addressed.

The methodology was briefly described and justified – this will be explored in more

detail in Chapter 3. Finally, the outline of the thesis was presented. On these

foundations the thesis can proceed with the author’s detailed review of the extant

literature in Chapter 2.

8

CHAPTER 2

LITERATURE REVIEW: UNDERSTANDING SUPPLY CHAIN

MANAGEMENT

2.1 General Background to Literature Review

Embarking on a literature review in the field of supply chain management (SCM) is

fraught with difficulty. As stated by Cousins et al. (2006):

To an extent, SCM suffers (or benefits) from being studied from a wide range of

academic disciplines and diverse theoretical perspectives. On the one hand this

encourages a rich and lively debate, but it may also lead to a fragmented literature,

with overlapping constructs and a failure to produce consistent findings (p. 701).

Similarly, Storey et al. (2006) note in their major SCM literature review, that the field is

characterised by fragmentation. In their bibliographic review of recent SCM literature,

Charvet et al. (2008) observe “an explosion of interest across disciplines and journals”

(p. 64) but note that “there appear to be multiple broad streams of research that are

developing relatively independently of each other” (p. 65). Lejeune and Yakova (2005)

suggest that the diverse nature of SCM literature is a product of two factors: firstly, the

field is at “the confluence of many other disciplines”; secondly, it “comprises different

inbound and outbound entities operating at various stages (i.e. procurement, production,

distribution) in the supply chain” (p. 82). In other words, SCM is both multidisciplinary

and multifunctional. Croom et al. (2000) identify 11 “subject areas we consider to be

core to any supply chain management literature survey as a discipline”1.

Bechtel and Jayaram (1997) identified nine “content literature areas” and five “process

literature areas” (p. 21). The former refer to literature related largely to traditional

functional areas (e.g. purchasing and distribution) while the latter refer to literature

related largely to SCM enablers such as information technology (IT) and performance

measures. Otto and Kotzab (2003) “identified six possibilities to look at SCM” (p. 308):

systems dynamics, operations research, logistics, marketing, organisation and strategy.

Chen and Paulraj (2004a) identify a number of specific fields (i.e. purchasing and

1 Purchasing and supply; logistics and transportation; marketing; organisational behaviour, industrial organisation, transaction cost economics and contract view; contingency theory; institutional sociology; systems engineering; networks; ‘best practices’; strategic management; and economic development.

9

supply, logistics and transportation, operations management, marketing, organizational

theory, management information systems and strategic management) all of which have

contributed to the explosion of SCM literature.

This proliferation of SCM literature has prompted scholars to classify the literature in

various ways. For example, Tan (2001) illustrates the evolution of SCM from both a

purchasing and supply perspective, as well as a transportation and logistics perspective.

Harland et al. (1999) classified research in this area according to the level of integration

between supply chain activities. The four levels are:

1. Internal level, which considers only those activities which are entirely internal to

the focal company;

2. Dyadic level, which considers single two-party relationships (between, for

example, supplier and manufacturer or manufacturer and distributor/retailer);

3. Chain level, which encompasses a set of dyadic relationships including a

supplier, a supplier's supplier, a customer and a customer's customer; and,

4. Network level, which concerns a wider network of operations.

Storey et al. (2006) note that the precepts of SCM as portrayed in the literature are a mix

of description, prescription and the identification of trends. They suggest that the

literature “tends to move rather imperceptibly” (p. 757) between these three elements.

Lejeune and Yakova (2005) suggest that existing SCM literature classification

frameworks are based on the following six criteria. (p. 83):

1. Type of inter-functional integration;

2. Type of issues faced in SCM;

3. Type of modelling techniques used in SCM;

4. Methodology used and content addressed;

5. Type of product (functional or innovative) and supply chain strategy; and,

6. Level of supply chain integration.

Chen and Paulraj (2004b) examined over 400 articles from several diverse disciplines in

what they claim “may be the most comprehensive analysis of the multidisciplinary,

wide-ranging research on SCM” (p. 132) – see Appendix 1. This is amalgamated into

their proposed theoretical framework for SCM research based around the main thematic

areas of strategic purchasing, supply management, logistics integration, supply network

coordination and supply chain performance. Figure 2.1 (below) shows the proposed

framework.

10

Figure 2.1: Theoretical Framework for SCM Research2 Source: Chen and Paulraj (2004b, p. 133)

Furthermore, a plethora of supply chain management (SCM) definitions have been

developed in recent years. There is evidence of differences in emphasis and approach

between different industrial sectors, geographical areas and functional backgrounds.

Furthermore, a variety of associated terminologies have also been developed which has

added to the complexity. As noted by Ross (1998), this can limit management’s

understanding of the SCM concept and the practical effectiveness of its application.

Nonetheless, SCM has risen to prominence in recent years in both academic and

commercial circles. The number of professional bodies involved in the area is also a

reflection of the growth in interest in the subject. However, there is still no universally

accepted definition of what SCM is (and, indeed, is not). As pointed out in a widely

cited article by Mentzer et al. (2001, p.2):

Despite the popularity of the term Supply Chain Management, both in academia

and practice, there remains considerable confusion as to its meaning. Some

authors describe SCM in operations terms involving flow of products and

materials, some view it as a management philosophy, and some view it as a

management process.

Given the quantity and range of SCM literature, the review set out in this Chapter is

structured around a number of specific thematic areas and comprises 16 sections as

shown in Figure 2.2 (below).

2 Literature references associated with each of the main areas and their constituent sub-areas are shown in Appendix 1.

11

Figure 2.2: Structure of Chapter 2

Section 2.2 provides an overview of the evolving context of SCM based on a number of

factors which are changing the global supply chain landscape. Section 2.3 then

examines the historical evolution of SCM since its introduction by consultants in the

early 1980s. Many definitions of SCM have been proposed, each of which has a

particular focus and emphasis. Section 2.4 introduces and critiques some of the most

widely cited definitions. Several authors have attempted to define SCM with reference

to more traditional and conventional approaches to business management. Section 2.5

sets out a number of these “paradigm shift” approaches in an effort to illustrate some of

the key features of contemporary SCM. Section 2.6 then explores the theoretical basis

of the subject and concludes that there is a need for more robust and widely adopted

theories. Section 2.7 goes on to introduce the author’s definition of SCM based on the

Four Fundamentals of SCM. As shown in Figure 2.2, these five bodies of knowledge

informed the development of the Four Fundamentals – each of which is described in

sections 2.8 to 2.11 – with section 2.12 making some concluding observations about the

construct. Section 2.13 explains the role within SCM of one of its principal antecedents,

namely logistics, as well as the relationship between SCM and other established subject

domains. Section 2.14 then reflects on the Four Fundamentals with particular reference

to various sets of guidelines on good SCM practice (or “idealised schemas”) and argues

that they represent something more than simply a definition of SCM. Based on the

12

foregoing, section 2.15 sets out the research questions to be explored in this thesis.

Finally, some general observations are made in section 2.16 by way of conclusion.

2.2 The Evolving Supply Chain Management Context

2.2.1 Introduction

The literature suggests that a number of key issues are changing the supply chain

management (SCM) and logistics strategic landscape. For example, Hameri and Hintsa

(2009) identified several trends and drivers of change in a recent study commissioned

by the World Customs Organisation (WCO)3. Arguably, the three most significant such

issues are:

1. Internationalisation (or globalisation) of supply chains;

2. Vertical disintegration; and,

3. The changing role of the supply chain as a source of strategic leverage.

Sweeney (2007) asserts that this is in line with much of the published work. For

example, Storey et al. (2006, p. 769) point out that their work “concurred with the

literature in identifying globalisation, outsourcing and fragmentation as three major

drivers”. Vertical disintegration is largely a consequence of outsourcing, while

fragmentation in this context refers to strategic leverage, particularly in the context of

product strategy4. Internationalisation is being driven by changing structures in the

international economic and business environment. Vertical disintegration and the

changing strategic view of the supply chain are both parts of the strategic response of

firms to competitive pressures in the marketplace. The author recognises that these three

issues are in many ways interrelated and interdependent5. Nonetheless, the following

sections discuss each of these issues in some detail.

3 They are related to increased off-shoring of operations through truly global manufacturing, characterized by its intercontinental supply of materials; increased product complexity with shorter product life cycles; increased importance of business-to-government networking for operational and security efficiency; introduction of new supply chain services integrating financial, physical and information flows leading to further consolidation in the logistics markets; and the overall increase in risks and vulnerabilities in international supply chains. increased importance of business-to-government networking for operational and security efficiency; introduction of new supply chain services integrating financial, physical and information flows leading to further consolidation in the logistics markets; and the overall increase in risks and vulnerabilities in international supply chains. 4 Fragmentation refers to, for example, SKU proliferation, shortening product life cycles and the requirement for increased customistion. 5 For example, outsourcing of manufacturing to lower labour cost economies is facilitated by economic liberalisation in these countries.

13

2.2.2 Internationalisation

The structure of the international economic and business environment has changed

significantly in recent years. The growth of trade blocs throughout the world has

resulted in increasing global economic integration. This evolution, largely based on the

reduction of barriers to the movement of capital, goods, services, people and

information internationally, has facilitated increased international trade and foreign

direct investment (FDI). The value of world merchandise trade reached about $6.07

trillion in 2002. In 1990 it was less than $2.85 trillion (UN, 2004). According to the

World Trade Organisation (WTO), international trade flows multiplied by a factor of 25

between 1950 and 2003 (WTO, 2004). Annual foreign direct investment (FDI)

expanded over 19-fold between 1973 and 2004, that is from $21.5 billion to over $410

billion (UNCTAD, 2004). These trends have resulted in the increasing

internationalisation of supply chains. This can be related to the “buy–make–move–sell”

model of product supply chains (New, 1997; NITL, 2000).

Buy. Global sourcing of raw materials and other inputs has now become a reality for

many organisations as the structure of the international economic and business

environment has evolved (Fagan, 1991; Trent and Monczka, 2003). The WTO provides

an interesting example in its 1998 annual report (WTO, 1998). In the production of an

“American” car, 30 per cent of the car’s value originates in Korea, 17.5 per cent in

Japan, 7.5 per cent in Germany, 4 per cent in Taiwan and Singapore, 2.5 per cent in the

United Kingdom and 1.5 per cent in Ireland and Barbados. That is, “… only 37 per cent

of the production value … is generated in the United States”. This phenomenon is large

enough to be noticed in aggregate statistics. Feenstra and Hanson (1996) used US

input–output tables to infer US imports of intermediate inputs. They found that the

share of imported intermediates increased from 5.3 per cent of total US intermediate

purchases in 1972 to 11.6 per cent in 1990. Campa and Goldberg (1997) found similar

evidence for Canada and the UK.

Make. Access to lower cost manufacturing worldwide is now possible. For example,

the expansion of China in recent years, based to a large extent on outsourcing (or

“offshoring”) of labour-intensive manufacturing by companies from developed

countries, is indicative of this. No other country has attracted as much FDI as China. In

2004, approximately $60 billion of FDI was absorbed; between 1979 and 2004, the total

was approximately $560 billion (UNCTAD, 2004). As a result China is growing rapidly

14

and attaining pre-eminence in global manufacturing in certain sectors. For example, by

2005 the country was already producing 50 per cent of the world’s cameras, 30 per cent

of air conditioners and televisions, 25 per cent of washing machines and 20 per cent of

refrigerators (Pinto, 2005). Similar trends have occurred in Eastern Europe. For

example, The Economist (2001) has noted strong and growing FDI flows into the region

in the period leading up to EU enlargement in 2004.

Move. The above has implications for the logistics and distribution strategies of

companies (Waters, 2004). Increased trade volumes globally have created the need for

new logistics pipelines. The growth in the international third party logistics (3PL) sector

is a reflection of this. The large number of mergers and acquisitions in the sector has

been driven significantly by the desire of companies to have a stronger global presence

(Eyefortansport, 2001). With specific reference to the European freight industry, Peters

(2000) noted that growth in the 1990s has offered a lesson that “the country-by-country

model for logistics is no longer valid; companies have begun to reorganize themselves

into continental operations based on integration and rationalisation” (p. 171).

Sell. Furthermore, as markets have opened up internationally for a range of products

and services, international (and in some cases global) selling has become the reality.

The cases of China and India are worthy of particular comment. As pointed out in a

survey in The Economist (2005), the two countries are home to nearly two-fifths of the

world’s population and are two of the world’s fastest-growing economies. A report by

America’s National Intelligence Council (2004) likened their emergence in the early

21st century to the rise of Germany in the 19th and America in the 20th century, with

“impacts potentially as dramatic”. The liberalisation of markets has sharpened the focus

on the need for more robust approaches to international marketing strategy (Bradley,

2004; Cateora and Graham, 2004). For example, the term “glocalisation” (from “global”

and “localisation”) has been used to refer to the creation of the local (country or

regional) market presence of a global enterprise (Fan and Huang, 2002).

In short, as economic and business globalisation has happened so supply chain

architectures have become more global. The resulting challenges in terms of SCM and

supply chain design (SCD) have been the subject of significant research, debate and

discussion (for example: Arntzen et al., 1995; Gourdin, 2000; Simchi-Levi et al., 2002;

Bolstorff and Rosenbaum, 2003; Ayers, 2003).

15

2.2.3 Vertical Disintegration

Companies are increasingly focusing on what they regard as their core activities or

competencies. Oates (1998) defines core competencies as the central things that

organisations do well. The corollary of this is that activities regarded as “non-core” are

often being outsourced. Greaver (1999, p. 70) states that “non-core competencies take

up time, energy and workspace, and help management lose sight of what is important in

an organisation“. Furthermore, the trend towards economic and business globalisation

has facilitated the outsourcing of various activities to overseas locations (offshoring –

see above). Key supply chain activities are increasingly being outsourced to third-party

organisations. This can again be related to the “buy–make–move–sell” model of product

supply chains.

Buy. Purchasing and procurement activities have generally not been outsourced in the

traditional sense but the development of purchasing consortia has meant some sharing

of responsibility for this activity between companies. Hendrick (1997, p. 1) defines a

purchasing consortium as:

A formal or informal arrangement, where two or more organisations, who are

separate legal entities, collaborate among themselves, or through a third party, to

combine their individual needs for products from suppliers and to gain the

increased pricing, quality and service advantages associated with volume buying.

Essig (1999) notes that a purchasing consortium is often just one element of an overall

supply strategy.

Make. The classic “make versus buy” decision has been a central theme in the field of

manufacturing strategy for decades (for example, Hayes and Wheelwright, 1984). The

traditional focus was largely on the financial and economic analysis of in-house versus

outsourced options for particular processes within a manufacturing operation.

Manufacturing outsourcing decision-making processes now tend to take a broader and

more strategic view (for example, Hill, 1999). Many large manufacturers have

outsourced significant parts of their production activity to third parties (for example:

Edwards and Edwards, 2000; Hassey and Lai, 2003). For example, in the electronics

sector the trend is one of original equipment manufacturers (OEMs) outsourcing

significant amounts of manufacturing to contract manufacturing companies. Companies

16

in the electronic manufacturing services (EMS) sector, such as Flextronics, Foxconn

and Celestica6, have grown rapidly as a result.

Move. In recent decades, transport and a range of other logistics activities have been

outsourced by manufacturers and retailers (Scott and Westbrook, 1991; McKinnon,

1999). The 3PL sector has developed rapidly as it has responded to its customers’

requirements for the supply of tailor-made services (Razzaque and Sheng, 1998;

Skjoett-Larsen, 2000). The European Union PROTRANS project (PROTRANS, 2003)

developed a definition of 3PL based on a wide number of definitions which have

appeared in the literature:

Third-party logistics are activities carried out by an external company on behalf of

a shipper and consisting of at least the provision of management of multiple

logistics services. These activities are offered in an integrated way, not on a stand-

alone basis. The co-operation between the shipper and the external company is an

intended continuous relationship.

This definition reflects the manner in which shippers’ requirements have evolved in

recent years. The emphasis now is on the provision of integrated multiple services and

the development of relationships.

Sell. Selling as a process has generally not been outsourced in the traditional sense.

Nonetheless, many of the individual activities which comprise sales channels may be

owned by other companies. The actual selling of products to consumers may be carried

out by retailers, who may in turn obtain the products from wholesalers; third-party

owned and managed call centres may be an integral part of the selling process; third-

party agents, franchisees or distributors may also have some responsibility (for example,

Friedman and Furey, 1999).

The above has resulted in a shift away from the traditional model of “control through

ownership” towards models which are based on management and control through

effective supply chain relationship management. The former is based on the strategic

logic of vertical integration. Vertical integration is the degree to which a firm owns its

upstream suppliers and its downstream buyers (Greaver, 1999). Harrigan (1999)

provides a good description of the logic underpinning this approach to strategic

development. The latter, effectively a process of vertical disintegration, has taken place

6 See www.flextronics.com, www.foxconn.com, www.celestica.com

17

as a result of the trends outlined above (Mpoyi, 1999; Langlois, 2001). Recent

developments in information and communications technology (ICT), in particular

Internet technologies, have facilitated this process and laid the foundations for the

“network economy model” (Reddy and Reddy, 2001). According to Hugos (2002)

traditional supply chain models have given way to virtual integration of companies. In

short, as outsourcing of various elements of supply chain functionality takes place,

supply chain architectures are becoming more virtual. The traditional fully vertically

integrated approaches are being replaced by contemporary fully virtually integrated

approaches – a new FVI is evolving.

2.2.4 Strategic Leverage

Classically in the field of strategic management the generic approaches of cost

leadership, differentiation and focus have been identified (Porter, 1980). Porter’s classic

text described these alternatives, as follows:

• A cost leadership strategy requires a company to be a low cost supplier, and to

sell either at below average industry prices to gain market share, or at industry

average prices to earn a profit higher than that of rivals;

• A differentiation strategy requires a product or service that offers unique

attributes that are valued by customers, thereby allow premium pricing; and,

• A focus strategy concentrates on a narrow segment and within that segment

attempts to achieve advantage through either cost leadership or differentiation.

A significant proportion of the overall cost base of companies is in the supply chain. In

the automotive industry, for example, A.T. Kearney (1999) reported that typically

component (30 per cent), manufacturing and assembly (28 per cent) and distribution

(four per cent) costs together represent 62 per cent of sales price. Hence, any

worthwhile cost leadership approach needs to focus on the optimisation of total supply

chain costs and the elimination of non-value-adding activities (NVAs). An NVA may be

defined as7: any activity (or resource or asset) that adds cost (or time) to any supply

chain process without adding value from a customer perspective. Much of this lean

thinking has its origins in the Japanese automotive industry, in particular in the Toyota

Production System (TPS) and the just in time (JIT) paradigm (Ohno, 1988; Womack

and Jones, 2003). The main objective of this thinking was the elimination of waste (or

7 Author’s definition based on Jones et al. (1997), Goldratt and Cox (1992), Womack and Jones (2003) and others.

18

“muda” in Japanese). Christopher and Gattorna (2005) present evidence that effective

SCM provides “opportunities for significant cost reduction and increased profits” (p.

115).

Customer service is becoming a key source of differentiation or an order winning

criterion in many sectors (Christopher, 2005). An order winning criterion (or order

winner) is a feature of the product or service offering which differentiates it from the

competition and is, therefore, likely to be a source of increased market share; an order

qualifier, on the other hand, is a feature which must exist to ensure that a product or

service gets into the market in the first instance and stays there (Hill, 1999). The latter –

i.e. order qualifiers – tend to have order losing rather than order winning characteristics.

In many sectors the importance of customer service relative to product quality (now

largely an order qualifier) and price (largely determined by the dynamics of supply and

demand in the market and subject to downward pressure in many sectors) has increased

(Sweeney, 2004). Customer service is delivered by the supply chain. In this way, the

supply chain itself has become a key factor in the development of a differentiation

strategy.

As pointed out earlier, a focus strategy concentrates on a narrow segment and within

that segment attempts to achieve advantage through either cost leadership or

differentiation. The points made above in relation to the role of SCM in strategy

formulation and implementation are, therefore, equally relevant in the context of a focus

approach.

In short, a company pursuing a cost leadership, a differentiation, or a focus strategy can

leverage the supply chain as a fundamental element of its effort to improve competitive

performance. The role of SCM in strategy formulation and implementation is given

extensive treatment in the literature (for example: Simchi-Levi and Kaminsky, 2003;

van Hoek and Harrison, 2004; Cohen and Roussel, 2004). Two approaches are worthy

of particular mention.

Firstly, Christopher and Ryals (1999) argued that SCM has a central position in the

creation of shareholder value. In this context shareholder value is defined as the

financial value created for shareholders in the companies in which they invest. The four

basic drivers of enhanced shareholder value (i.e. revenue growth, operating cost

19

reduction, fixed and working capital efficiency) are directly and indirectly affected by

logistics management and supply chain strategy. The framework of value-based

management (VBM) plays a potentially important role in achieving these improvements

in practice. The paper concludes by noting that, “By seeking out opportunities for

partnership in the supply chain combined with an emphasis on the reduction of non-

value-adding time, the evidence suggests, enduring improvement in shareholder value

can be achieved” (p.9). The emphasis on time compression is important as it has the

potential to reduce cost and improve customer service simultaneously (see section

2.8.4).

Secondly, a graphical representation of Gattorna’s “Strategic Alignment Model” is

shown in Figure 2.3 (Gattorna et al., 2003). He argues that the empirical evidence

suggests that if organisations are to achieve sustained high levels of financial and

operating performance, the four elements shown in the diagram must be dynamically

aligned.

Figure 2.3: The Strategic Alignment Model Source: Gattorna et al. (2003, p. 5)

Alignment in this context means:

• an understanding of customers’ buying behaviour;

• corresponding value propositions to align with the dominant buying behaviours;

• the appropriate capabilities (or cultural capability) embedded in the organisation

to underpin the delivery of these specific value propositions; and,

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• a composite leadership style at the executive level to ensure the appropriate sub-

cultures are in place as required.

Organisations seeking superior performance must be both very aware of their

customers’ expectations and of their own internal capability. If these two dimensions

are addressed adequately, then an organisation is fully aligned with its marketplace.

This is in line with classical approaches to strategy formulation – for example, Porter

(1980, p. 3) states that “the essence of formulating a competitive strategy is relating the

company to its environment” – but with a strong focus on the role of SCM in ensuring

that strategic plans are realised in practice. In this context, Sun et al. (2009) emphasise

the importance of alignment between supply chain strategy and uncertainty in the firm’s

business environment.

2.2.5 Concluding Comments

Economic and business globalisation is happening. Companies are increasingly

focussing on their core competencies and as a result vertical disintegration has emerged.

Finally, more and more companies are beginning to regard the supply chain as a source

of strategic leverage. In short, supply chains have become more global and more virtual

(and, therefore, their management has become more complex) and SCM is becoming a

more integral and integrated part of overall corporate strategy. Simultaneously,

customers have become more discerning and are demanding better quality products,

higher levels of service and reduced prices. This increasingly competitive business

environment has sharpened the focus on the need for more robust approaches to supply

chain design and management.

2.3 Historical Evolution of SCM

The term SCM was originally introduced by management consultants in the early 1980s

(Oliver and Webber, 1982). Since then several attempts have been made to place

contemporary SCM thinking in an historical context and/or to plot its historical

development and evolution. The following sections provide an overview of three of the

more useful and widely cited approaches. They also provide a framework for describing

some key concepts and models which are now effectively constituent elements of the

overall integrated SCM paradigm.

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2.3.1 Fragmentation to Integration Model

Battaglia (1994) developed a model which indicates the way in which SCM has evolved

from its main constituent functions from the 1960s to date (see Figure 2.4). It indicates

that the evolution has involved a shift from highly fragmented to much more integrated

approaches with the 1990s characterised as the decade of “Total Integration”.

During the “Evolving Integration” decade (the 1980s) various functional areas became

integrated into materials management and physical distribution – these then became

further integrated under the logistics umbrella. SCM extends this integration further by

linking logistics with manufacturing, information technology (IT), marketing, sales and

strategic planning. The model provides a useful visual representation of the way in

which companies have attempted to move away from the functional stovepipe or silo

approach to more integrated approaches, facilitated by IT. It is interesting to note that

this model is analogous to two other three-phase approaches to logistics evolution.

Figure 2.4: SCM Evolution Source: Battaglia (1994, p. 49)

Masters and Pohlen (1994) described the evolution of logistics management and the role

of logistics managers in the following three phases:

1. Functional management (1960–1970) - functions such as purchasing, shipping

and distribution are each managed separately;

2. Internal integration (1980s) - the management of the supply chain functions of a

single facility is unified and it becomes the responsibility of a single individual;

and,

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3. External integration (1990s) - the management of supply chain functions

throughout the chain is unified requiring cooperation and coordination between

links in the chain.

La Londe (1994) also describes the evolution of integrated logistics in three phases:

1. Physical distribution - the distribution of goods is all that needs to be managed

by a logistics manager;

2. Internal linkages - it is important for the logistics manager to control both

internal supply functions and physical distribution; and,

3. External linkages - logistics management requires cooperation in management

with upstream and downstream entities to maximise the benefits of the total

logistics system.

The specific relationship between SCM and logistics will be discussed in sections 2.10

and 2.13.

2.3.2 Lean/Functional to Agile/Customised Migratory Model

Christopher and Towill (2000) used the personal computer (PC) supply chain to

illustrate the migration from lean, functionally-oriented approaches to agile and more

customised supply chain architectures. They use a model originally developed by

Murokoshi (1994) to highlight the four main stages in this evolutionary process (see

Table 2.1).

Table 2.1: Migration from Lean/Functional to Agile/Customised Supply Chains Source: Christopher and Towill (2000, p. 212)

As pointed out earlier, lean thinking has its origins in the Japanese automotive industry,

in particular in the Toyota Production System (TPS) and the just in time (JIT) paradigm

23

(Ohno, 1988; Womack and Jones, 2003). The main objective of this thinking was the

identification and elimination of non-value-adding activities (NVAs) or waste (or

“muda” in Japanese). As noted earlier, an NVA may be defined as8: any activity (or

resource or asset) that adds cost (or time) to any supply chain process without adding

value from a customer perspective. In the early 1980s the focus was largely on cost

optimisation through improved efficiency, particularly in manufacturing processes.

As customer service issues such as product availability and lead time evolved from

being order (or market) qualifiers to becoming order (or market) winners, the need

emerged for not just lean functions and supply chains, but for responsive and customer-

oriented configurations. In other words, agility became a key concern. The agility

concept is closely associated with Cranfield University in the UK and with Prof. Martin

Christopher in particular (see, for example: Christopher, 2000; Christopher and Towill,

2001). Christopher (2000, p. 37) defines agility as “a business-wide capability that

embraces organisational structures, information systems, logistics processes and, in

particular, mindsets”. Flexibility, with its origins as a business concept in flexible

manufacturing systems (FMS), is a key characteristic of an agile organisation. In

essence, the need for a shift from lean to agile paradigms has been driven by dynamic

and increasingly competitive global markets. The concept of mass customisation (MC)

is a key driver of this shift.

The MC concept was first coined by Davis (1989) and it promotes the ability to provide

individually designed products and services to every customer. This contrasts starkly

with the Henry Ford Model T paradigm. It is achieved through high process agility,

flexibility and integration (see, for example: Pine et al., 1993; Hart, 1995; Eastwood,

1996; Da Silveira et al., 2001). In short, as markets become more competitive and

customers more discerning, there is a need to move towards the MC ideal, and supply

chain agility is the route for making this happen. As Christopher (2000) notes, leanness

may be an element of agility but it will not in itself provide the degree of organisational

flexibility which is increasingly required to meet changing customer requirements9.

More recently, Liu and Deitz (2011) found that MC capabilities are driven by customer-

focused product design and reduced supplier lead times. 8 Author’s definition based on Jones et al. (1997), Goldrat and Cox (1992), Womack and Jones (2003) and others. 9 He actually makes the point that an industry may be very lean but not be sufficiently flexible or ‘nimble’ to consistenly meet customer requirements profitably. He suggests that the automotive industry might be a case in point.

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A final element of the Christopher and Towill Migratory Model worthy of comment is

the leagility concept. The desirability of being both lean and agile has resulted in the

rather contrived term, “leagile”, being coined. A leagile supply chain is defined as one

which combines elements of both the lean and agile approaches. In technical terms,

leagility involves the strategic use of a decoupling point (Naylor et al., 1999). This

decoupling point aims to achieve responsiveness to volatile demand downstream (i.e. in

the market) while providing level scheduling upstream from the decoupling point. In

essence, it is an attempt to get the best of both worlds.

2.3.3 Lummus and Vokurka Historical Perspective

Lummus and Vokurka (1999) suggested that the origins of SCM can be traced to the

quick response (QR) programme in the textile industry and later to the efficient

consumer response (ECR) programme in the grocery industry.

The origins of QR are often traced back to Blackburn (1991) and a useful definition is

provided by Fisher and Raman (1996). In the specific context of the textile sector they

describe QR as:

An initiative designed to cut manufacturing and distribution lead times through a

variety of means including information technology such as electronic data

interchange, point of sale scanners, and bar coding, logistics improvements such

as automated warehousing and increased use of air freight, and improved

manufacturing methods, ranging from laser fabric cutting to reorganisation of the

sewing process into modular sewing cells (p. 87).

This definition recognises the central role of IT in the supply chain improvement

process and that improving the speed of response to customer requirements demands a

focus on both distribution and manufacturing issues. ECR originated from a grocery

industry task force that was established in 1992 (Kurt Salmon Associates Inc., 1993)

and focuses on the need for quick and accurate information flows in the supply chain as

the key to supply/demand synchronisation and inventory reduction. The key common

objective of QR and ECR is speed of response to customer requirements – both

recognise this as an integral element of value creation. They also recognise the

centrality of effective information management in the achievement of this objective.

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Lummus and Vokurka (1999) go on to outline other early documented efforts at

improving supply chain performance in companies across a range of sectors10. Their

paper continues with a focus on collaborative efforts aimed at identifying “best

practices” (for example, the SCOR model developed by the Supply Chain Council) and

on the need for a clear linkage between SCM and overall corporate strategy. It

concludes by suggesting seven guidelines for companies beginning to manage across

the entire supply chain. All seven relate, directly or indirectly, to the need for supply

chain companies to work in a more coordinated and collaborative way.

The Supply Chain Council (SCC) was established in 1996 and initially included 69

practitioner companies meeting in an informal consortium (Supply Chain Council,

2009). It had grown to approximately 800 members worldwide, across a range of

sectors, by 2005. The Supply Chain Operations Reference (SCOR) model is a product

of the SCC and “provides a unique framework that links business process, metrics, best

practices and technology features into a unified structure to support communication

among supply chain partners and to improve the effectiveness of supply chain

management and related supply chain improvement activities” (Supply Chain Council,

2009). Three key features of the model are important (see Appendix 2):

1. It integrates the concepts of business process re-engineering (BPR),

benchmarking and process measurement into an integrated framework.

2. It is based on five distinct management processes:

(i) Plan: Demand/supply planning and management.

(ii) Source: Sourcing stocked, make-to-order and engineer-to-order

products.

(iii) Make: Make-to-stock, make-to-order and engineer-to-order

production execution.

(iv) Deliver: Order, warehouse, transportation, and installation

management for stocked, make-to-order and engineer-to-order

product.

(v) Return: Return of raw materials and receipt of returns of finished

goods.

3. It contains three levels of process detail:

(i) Top level: Process types.

(ii) Configuration level: Process categories.

10 Hewlett-Packard, Whirlpool, Wal-Mart, West Co., Becton Dickinson, Baxter and Georgia-Pacific Corp.

26

(iii) Process element level: Based on process decomposition.

Since its first introduction, a number of papers have appeared in the academic literature

concerning the SCOR model (for example: Stewart, 1997; Huan et al., 2004). In a

recent paper based on data from 125 North American manufacturing firms, Zhou et al.

(2011) stated that, “the findings provide managers with empirical evidence that the

SCOR model is in fact valid” (p. 332).

2.3.4 Key Lessons from SCM Historical Evolution

The three approaches to SCM historical evolution outlined above highlight at least four

key elements of contemporary thinking in the field:

1. There is a need to focus clearly on customer service issues, in particular the

speed of response to customer requirements;

2. Markets have become more sophisticated and customers more discerning – this

has resulted in the need to understand the relevance of MC (as opposed to

traditional “one size fits all” perspectives);

3. Intra-company integration of the constituent elements of supply chain

functionality requires a strong management focus; and,

4. Effective information management, facilitated by recent developments in

information and communications technology (ICT), is important in improving

customer service performance.

Finally, the work of Gattorna et al. (2003), in particular the performance/capability

continuum (see Figure 2.5), provides a useful conceptual overview which mirrors SCM

historical evolution in many respects. Furthermore, most of the elements of

contemporary SCM identified above are captured in this continuum. In particular, the

shift from a focus on “function” to one on “collaboration” and “synchronisation”

reflects the centrality of integration and effective information management in SCM

thinking. The next section explores definitions of SCM in the literature with a view to

synthesising the salient constituent elements of the field.

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Figure 2.5: Performance/Capability Continuum Source: Gattorna et al. (2003, p. 47)

2.4 SCM Definitions

As noted earlier, a plethora of SCM definitions have been developed since the term was

first introduced in the early 1980s. This section provides an overview of some of the

important definitions and draws some conclusions from a synthesis of these definitions.

2.4.1 Defining SCM (Mentzer et al., 2001)

Mentzer et al. (2001) provide an excellent overview of the more important of these

definitions (see Appendix 3) and, based on their analysis, provide a definition of their

own.

From this representative sample of SCM definitions, Mentzer et al. (2001) suggested

that three definition categories can be identified. Firstly, many authors define SCM as a

management philosophy. In this context, SCM adopts a systems approach to viewing

the supply chain as a whole, from the supplier to the ultimate customer. A chain-wide

collaborative approach, driven by a strong customer focus, aims to synchronise intra-

firm and inter-firm capabilities. Secondly, many authors consider SCM as a set of

activities to implement a management philosophy. Seven activities are proposed, based

on the earlier research, which appear necessary in the successful implementation of the

philosophy:

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1. Integrated behaviour in customer and supplier firms;

2. Mutually sharing information;

3. Mutually sharing risks and rewards;

4. Cooperation among supply chain members;

5. The same goal and the same focus on serving customers;

6. Integration of processes; and,

7. Partnerships to build and maintain long-term relationships.

Each of these activities relates to various aspects of inter-firm relationship management.

Thirdly, Mentzer et al. (2001) note that many authors have focussed on SCM as a set of

management processes. In this context, a process is defined as, “a specific ordering of

work activities across time and place, with a beginning, an end, clearly defined inputs

and outputs, and a structure for action” (p. 10). This is very much in line with business

process reengineering (BPR) thinking, as championed by Michael Hammer (for

example, Hammer and Champy, 1993). In essence, business processes take inputs and

create outputs, and these outputs should be of value to a customer.

2.4.2 SCM: A Strategic Perspective (Bechtel and Jayaram, 1997)

Bechtel and Jayaram (1997) presented a comprehensive review of definitions of both

“supply chain” and “supply chain management” which appeared between the early

1980s and the mid 1990s. Based on this, they synthesised existing definitions into five

“supply chain schools of thought”. Appendix 4 shows the scholars associated with each

school, as well as graphical representations of the main tenets of each.

The schools of thought are:

1. Functional Chain Awareness School, which recognises that a chain of

functional areas exists across an organisation;

2. Linkage/Logistics School, which goes beyond the chain awareness school by

recognising that there is a chain from suppliers to end users and begins to

address material flows through this chain;

3. Information School, which emphasises the flow of information between supply

chain members;

4. Integration/Process School, which focuses on integrating supply chain areas

into a system – defined as a set of processes – which adds value; and,

5. Future, based on “a demand driven seamless pipeline emphasising relations as

well as transactions”.

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The work of Bechtel and Jayaram (1997) in identifying these schools of thought

provides some noteworthy insights into the essence of SCM. Firstly, there is a strong

emphasis on the concept of integration and an associated emphasis on relational as

opposed to purely transactional issues. They specifically note that “the SCM concept is

becoming closely tied to the concepts of partnerships, strategic alliances, and other

cooperative relationships with supply chain members” (p. 18). Secondly, they question

the use of the word “supply” in SCM as it implies a traditional push orientation. As

SCM is driven by an understanding of customer requirements, they suggest that “a

better term might be ‘seamless demand pipeline’” (p. 18). There is a general recognition

in the extant literature (see, for example: Christopher (2010); Kotzab et al. (2011); Lado

et al. (2011)) that the primary focus of “supply” chains is on meeting the evolving needs

of customers. Thus, whilst Bechtel and Jayaram (1997) may be accurate that “demand”

is a more technically accurate word than “supply” in this context, there would appear to

be little merit in attempting to replace a nomenclature that is by now – as pointed out in

section 1.2 (above) – well established in both academic and commercial circles.

2.4.3 CSCMP Definition

Founded in 1963, the Council of Supply Chain Management Professionals (CSCMP)11

is a US-based association for individuals involved in SCM with over 10,000 members

(CSCMP, 2009). It defines SCM as follows:

Supply chain management encompasses the planning and management of all

activities involved in sourcing and procurement, conversion, and all logistics

management activities. Importantly, it also includes coordination and

collaboration with channel partners, which can be suppliers, intermediaries, third-

party service providers, and customers. In essence, SCM integrates supply and

demand management within and across companies.

The phrase “logistics management” is incorporated into this definition. It defines this as:

that part of supply chain management that plans, implements, and controls the

efficient, effective forward and reverse flow and storage of goods, services and

related information between the point of origin and the point of consumption in

order to meet customers’ requirements.

The specific emphasis on “reverse flows” is a recognition of the increasing importance

of reverse logistics. In discussing boundaries and relationships, CSCMP goes on to state

11 CSCMP was known until 2005 as the Council of Logistics Management (CLM) and before that was known as the National Council of Physical Distribution Management (NCPDM) from its inception in 1963.

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that SCM is an “integrating function”, which “drives coordination of processes and

activities with and across marketing, sales, product design, finance and information

technology”. The approach represented by this definition reiterates some of the earlier

points and again has a strong emphasis on internal and external coordination and

collaboration. However, the final part of the SCM definition – i.e., “In essence, SCM

integrates supply and demand management within and across companies” – provides a

useful conceptual view of SCM and is noteworthy for its simplicity, with its focus on

synchronisation of supply and demand.

2.4.4 Key Lessons from SCM Definitions

The three approaches to defining SCM outlined above highlight at least three key

elements of contemporary thinking in the field, in addition to those identified based on

the earlier synthesis of SCM’s historical evolution (section 2.3.4):

1. The very fact that many SCM definitions exist may, of itself, represent a

limitation to developing a better understanding of the application of SCM in

practice;

2. Effective management of relationships with external parties which perform

key supply chain roles is a critical success factor; and,

3. The concept of reverse logistics, with its focus of supply chain activities

after the point of sale, has become more important.

2.5 Paradigm Shifts

As noted earlier, several authors have attempted to define SCM with reference to more

traditional and conventional approaches to business management. This section sets out a

number of these “paradigm shift” approaches in an effort to illustrate some of the key

features of contemporary SCM.

2.5.1 Christopher’s Paradigm Shifts

The work of Christopher was mentioned earlier in the context of supply chain agility

(see section 2.3.2). His various papers provide another valuable insight into the nature

of SCM (see, for example: Christopher and Ryals, 1999; Aitken et al., 2001;

Christopher and Towill, 2002; Christopher and Peck, 2004). An important theme in his

work is the move away from traditional approaches where companies viewed

themselves as independent entities (or self-contained islands) to an apparently

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paradoxical recognition that companies may have to cooperate to compete. This in turn

requires a shift from traditional arms-length and often adversarial customer/supplier

relationships towards relationships which are characterised by cooperation and trust.

Arising from this thinking Christopher and Ryals (1999) stated that, “SCM

encompasses both the internal management of the logistics processes that support the

flow of product and related information, as well as the upstream and downstream

linkages with suppliers and customers” (p. 3). This provides an insight into the concept

of supply chain competition, with which Christopher is closely associated. He suggests

that leading edge companies have realised the real competition is not company against

company, but rather supply chain against supply chain (Christopher, 2005).

2.5.2 Conventional Management and SCM (Storey et al., 2006)

The work of Storey et al. (2006) provides close parallels to the paradigm shifts of

Christopher. They refer to “an underpinning ‘big idea’ – or a number of interlocking big

ideas which help constitute and describe SCM” (p. 758). Table 2.2 (below) represents

an enumeration and categorisation of these core ideas. It shows clearly some of the key

paradigm shifts between “conventional management” and SCM, thus elucidating the

main constructs of SCM.

Table 2.2: Conventional Management and SCM – core concepts Source: Storey et al. (2006, p. 759)

From this perspective, SCM adopts a more critical strategic role with a strong focus on

long-term gains for companies upstream and downstream in the supply chain. There is a

strong emphasis on information and knowledge sharing and on the concept of replacing

inventory with information.

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2.5.3 Supply Chain “Mega-Trends” (Bowersox et al., 2000)

The work of Bowersox et al. (2000), based on research carried out over many years into

the SCM practices of global companies at Michigan State University, resulted in the

identification of 10 “mega-trends which will revolutionize supply chain logistics” (p. 1).

These reflect the shift from an industrial to an information technology driven society.

These are listed in Table 2.3 (below).

Table 2.3: Mega-trends in Supply Chain Logistics Source: Bowersox et al. (2000, p. 9)

The ideas incorporated in these trends again overlap with many of the concepts and

constructs suggested by Christopher and by Storey et al. (2006). It is interesting to note

that the authors’ assessment of the extent to which these trends have been realised in

North American firms is quite low. Just one of the trends (from customer service to

customer relationship management) is assessed above 5 (using a 1-10 scale). Several of

the trends (from absolute to relative value; from training to knowledge-based learning;

and, from management accounting to value-based management) are rated as low as 1-2.

Notwithstanding the subjective nature of these assessments, this indicates that there is

much work to be done by firms in realising these trends in practice.

2.5.4 Key Lessons from Paradigm Shifts

The adoption of thinking captured in these paradigm shifts has the potential to have a

profound impact on the nature of strategic thinking in companies of all kinds. It

challenges the conventional wisdom upon which the majority of traditional approaches

to strategic thinking and strategy formulation are based. However, the extent to which

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this thinking has been adopted – or even is understood – in practice is unclear. As

suggested by Christopher (1992), “leading edge” companies may well have adopted this

thinking to varying degrees but there is a need to understand its role and impact in the

wider business community.

2.6 Development of SCM Theory

2.6.1 Background

The work of Croom et al. (2000) in classifying SCM literature indicates clearly that

there is a lack of a recognised underlying theory. They classified SCM literature using

the primary methodology-orientation adopted (i.e. prescriptive or descriptive, and

theoretical or empirical). Figure 2.6 summarises the results.

Figure 2.6: Framework for Literature Classification Source: Croom et al. (2000, p. 74)

What is clear from this analysis is that the majority of SCM literature is primarily

empirical-descriptive. On the basis of this finding, the authors “argue that theoretical

development is critical to the establishment and development of SCM study” (p. 75).

New (1996) stated that “the new orthodox of SCM is in danger of collapsing into a

discredited management fad unless a reliable conceptual basis is developed” (p. 20);

Lambert et al. (1998) alluded to the need for building theory in the specific context of

developing normative tools and methods of successful SCM practice; Chen and Paulraj

(2004b) state that “our analysis confirms that the area is devoid of clear theory” (p.

150); Mentzer et al. (2004) note that, “much logistics literature and research has been

considered largely managerial in nature and lacking a rigorous orientation toward theory

development, testing, and application” (p. 606); Burgess et al. (2006) note that, “there

appears to be little consensus on the conceptual and research methodological bases of

SCM” (p. 703) and that, “for the field of SCM, the extent to which theories have been

34

developed appears to be slight” (p. 711); Storey et al. (2006) note that, “critiques of the

discipline of SCM suggest that it is atheoretical” (p. 758).

It is interesting to note that the latter two articles appeared in a special issue of the

International Journal of Operations and Production Management devoted to whether

SCM was emerging as an academic discipline. In their editorial, Cousins et al. (2006)

suggested that SCM is a “developing” discipline. Words such as “infancy” (Chen and

Paulraj, 2004b), “embryonic” (Chen and Paulraj, 2004a) and “emerging” (Storey et al.,

2006) are indicative of the perceived current situation in relation to SCM theory.

However, as suggested by Skjoett-Larsen (1999) “nothing is more practical than a good

theory” (p. 51). In a recent editorial in the Journal of Business Logistics, Fawcett and

Waller (2011) elaborated on this when they stated that:

Our world is chaotic and dynamic. Good theory is needed to: (1) resolve the many

pressing challenges that confront us daily; as well as to, (2) take advantage of the

tremendous opportunities that continue to emerge with the advent of new

technology, adjustments in government policy, and adaptations in social thought

(p. 3).

2.6.2 Theories of SCM and Logistics

A number of authors have proposed theoretical models to address the challenges raised

in section 2.6.1. For example (and as noted in section 2.1), Chen and Paulraj (2004b)

proposed a theoretical framework for SCM research based on their comprehensive

analysis of existing work in the field.

Mentzer at al (2004) adapted different elements of various “theories of the firm” in an

attempt to better understand the strategic role of logistics. These “theories of the firm”

include economic theories (neoclassical, market value and agency cost models) and

behavioural theories (e.g., resource dependence model and comparative institutional

theory). The tables from Mentzer et al. (2004) which summarise these theories are

shown in Appendix 5. Theoretical propositions based upon their “unified theory of

logistics” are also offered (see Appendix 5). However, the authors acknowledge that:

Although we have presented a unified theory of logistics based upon logistics

capabilities, we do not claim the proposed theory is the only framework to

understand and further study logistics. In fact, we offer the proposed unified

theory as only one way of looking at the logistics discipline. Therefore, future

35

research is strongly encouraged to challenge and/or refine our view of logistics. In

addition, how this theory of logistics fits into the larger area of supply chain

management needs to be further explored (p. 622).

They further acknowledge that their theory represents “only a starting point in what we

hope will be on-going development of a unified theory of logistics” (p. 622).

2.6.3 SCM and the Value Chain

One well-known approach to strategic thinking and strategy formulation, based on the

concept of the value chain, was introduced over a quarter of a century ago by Michael

Porter (see, for example, Porter, 1985). The concept of the value chain is based on the

process view of organisations, the idea of seeing a manufacturing (or service)

organisation as a system, made up of subsystems each with inputs, transformation

processes and outputs. Inputs, transformation processes and outputs involve the

acquisition and consumption of resources, such as money, labour, materials, equipment,

buildings, land, administration and management. How value chain activities are carried

out determines costs and affects profits.

Most organisations engage in hundreds, even thousands, of activities in the process of

converting inputs to outputs. These activities can be classified generally as either

primary or support activities that all businesses must undertake in some form.

According to Porter (1985), the primary activities are:

1. Inbound Logistics, which involve relationships with suppliers and include

all the activities required to receive, store and disseminate inputs;

2. Operations are all the activities required to transform inputs into outputs

(products and services);

3. Outbound Logistics, which involve relationships with customers and

include all the activities required to collect, store and distribute the output;

4. Marketing and Sales are activities that inform buyers about products and

services, induce buyers to purchase them and facilitate their purchase; and,

5. Service includes all the activities required to keep the product or service

working effectively for the buyer after it is sold and delivered.

The support activities are procurement, human resource management (HRM),

technological development and infrastructure. A graphical representation of Porter’s

value chain is shown in Figure 2.7.

36

Figure 2.7: Porter’s Value Chain Source: Based on Porter (1985)

Jacobs (2003, p. 62) notes that:

The value chain disaggregates a firm into its strategically relevant activities in

order to understand the behaviour of costs and the existing and potential sources

of differentiation. A firm gains competitive advantage by performing these

strategically important activities more cheaply or better than its competitors.

One implication of Porter’s thesis is that firms need to examine each activity in their

value chains to determine whether or not they have a real competitive advantage in the

activity. One consequence of this is that activities which are not a source of real

competitive advantage are often being outsourced (see section 2.2.3) thus creating more

virtual supply chain architectures.

The relationship between the value chain and SCM has been the subject of discussion in

several papers (for example: Barney, 1997; Lazzarini et al., 2001). As noted earlier,

supply chains are sets of activities representing successive stages of value creation. The

literature on SCM suggests that vertical interdependencies require a systemic approach

to the management of material and information flows between firms engaged in the

chain. On the other hand, Porter’s original value chain analysis was primarily an

approach that described a set of sequential activities creating value within firms12.

However, outsourcing of supply chain functionality and the resulting creation of more

virtual configurations has had the effect of extending the value chain beyond the

boundaries of individual firms. As noted by Christopher (2005, p. 14), “the supply chain

12 It is worth noting that attempts have been made to extend value chain analysis to activities between firms (for example Barney 1997).

37

becomes the value chain”. In other words, the distinction often traditionally espoused

between the value chain and the supply chain has become inconsequential. As

succinctly suggested by Christopher (2005, p. 14):

The effect of outsourcing is to extend the value chain beyond the boundaries of the

business. Value (and cost) is created not just by the focal firm in a network, but by

all the entities that connect to each other.

2.6.4 Relating SCM to Other Theories

Many scholars have suggested that SCM could benefit by “borrowing from other

theories” (Stock, 1997, p. 516). For example, Skjoett-Larsen (1999) studied SCM using

three well established theoretical approaches: transaction cost analysis, network

perspective and resource-based management. Halldorsson et al. (2007) built on this

work by exploring the application of these three theories, as well as principal-agent

theory, to the specific SCM research domains of third party logistics and new product

development. Their work suggests that a single theoretical explanation can not be relied

upon when analysing SCM phenomena:

Depending on the concrete situation, we can choose one theory as the dominant

explanatory theory, and then complement with one or several of the other

theoretical perspectives (p. 292).

They go on to conclude that “the main message in this paper is that there is no such

thing as a ‘unified theory of SCM’” (p. 292).

In their recent paper, Defee et al. (2010) reported on their review of papers in five “top

tier logistics and SCM journals”. Their work supports the view that the development of

the SCM body of knowledge can benefit by viewing issues through the lenses afforded

by other disciplines. Nonetheless, they point to the need for more SCM-specific theories

when they note that:

The vast majority of theories used in recent logistics and SCM research originated

in other disciplines. Growth in the discipline dictates the need for greater internal

theory development (p. 404).

2.6.5 Some Concluding Comments

While there is general agreement about the lack of theory in the field of SCM, there is

little consensus about how this deficiency can be best addressed. However, definitional

clarity would appear to be an issue upon which any meaningful development of SCM

38

theory needs to be predicated. Section 2.7 attempts to address this issue by proposing a

unified definition (rather than a unified theory) of SCM. Before describing this

definition, a number of points are worth highlighting.

Section 2.4.1 made reference to Mentzer et al. (2001). It is appropriate to revert to this

work once again, in particular to the two constructs proposed by the authors. Firstly,

they suggest that many definitions of SCM are trying to define two interdependent but

different concepts in one term. The first is referred to as supply chain orientation (SCO)

and is defined as “the recognition by an organisation of the systemic, strategic

implications of the tactical activities involved in managing the various flows in a supply

chain” (p. 11). However, SCM requires that SCO exists in several linked companies

across a supply chain. In other words, SCO is a prerequisite for SCM. The work of

Kotzab et al. (2006) reinforces this view based on a major survey of SCM

implementation in Denmark by noting that “organisations seem to have insufficient

SCO in order to direct their actions on business process integration with suppliers and

customers.” (p. 293).

Secondly, the definition of SCM proposed by Mentzer et al. (2001, p. 18) based on their

analysis of the literature is:

The systemic, strategic coordination of the traditional business functions and the

tactics across these business functions within a particular company and across

businesses within the supply chain, for the purposes of improving the long-term

performance of the individual companies and the supply chain as a whole.

This definition amalgamates a variety of concepts and philosophies into a single

sentence. Its authors claim that their work “should help practitioners as well as

researchers to understand SCM, to give guidance to what SCM is, its prerequisites, and

its potential effects on business and supply chain performance” (p. 19).

2.7 Towards a Unified Definition of SCM: The Four Fundamentals

A number of points are critically important from the earlier sections of this chapter.

Firstly, the very fact that many SCM definitions exist may, of itself, limit management’s

understanding of the SCM concept and the practical effectiveness its application (as

noted by, for example, Ross, 1998). Furthermore, a range of – often quite complex –

SCM language and terminology has evolved over the years. Given that there are many

39

bodies of literature associated with SCM this should not come as a major surprise.

Mentzer et al. (2001, p. 2-3) refer to “confusion”, “ambiguity” and “a need to examine

the phenomena of SCM more closely to define the term and concept”; Lambert (2004)

stated that there is a great deal of confusion regarding exactly what SCM involves;

Croom et al. (2000, p. 68) note that despite the existence of SCM since the early 1980s,

“conceptually the management of supply chains is not particularly well understood” and

go on to highlight the necessity for clear definitional constructs; Burgess et al. (2006, p.

704) observe that, “For the term SCM there appears to be little consensus on its

definition”; Kathawala and Abdou (2003, p. 141) conclude that SCM “has been poorly

defined and there is a high degree of variability in people’s minds about what is meant”.

Stock and Boyer (2009) summarise these points very well by stating that:

Without the adoption of a uniform agreed upon definition of supply chain

management (SCM), researchers and practitioners will not be able to “advance the

theory and practice” of the discipline. An integrated definition of SCM would

greatly benefit researchers’ efforts to study the phenomenon of SCM and those

practitioners attempting to implement SCM (p. 690).

Other scholars, including New and Payne (1995) and Saunders (1995) contend that

there is a confusing profusion of overlapping terminologies and meanings. For example,

Tan (2001, p. 41) noted that:

The literature is replete with buzzwords such as: integrated purchasing strategy,

integrated logistics, supplier integration, buyer/supplier partnerships, supply base

management, strategic supplier alliances, supply chain synchronization and supply

chain management.

He went on to suggest that supply chain management is a “widely used (and abused)

term” (p. 39). Croom et al. (2000) also note that many labels can be found referring to

supply chain and to practices for SCM, including: integrated purchasing strategy,

supplier integration, buyer/supplier partnership, supply base management, strategic

supplier alliances, supply chain synchronisation, network supply chain, value-added

chain, lean chain approach, supply pipeline management, supply network and value

stream. Cousins et al. (2006) also note the use of terms such as pipeline management,

network sourcing, demand management and value stream management.

Furthermore, many of the SCM definitions in the literature attempt to provide short

(often single-sentence) definitions (see above, in particular: CSCMP, 2009; Mentzer et

40

al., 2001). In the author’s view, the results are, almost inevitably, achievements in

verbal and linguistic dexterity rather than definitions which are likely to add clarity

from an SCM application perspective. Stock and Boyer (2009) provide a particularly

interesting example of this phenomenon. They developed their own “consensus”

definition of SCM based on 166 definitions that have appeared in the literature:

The management of a network of relationships within a firm and between

interdependent organizations and business units consisting of material suppliers,

purchasing, production facilities, logistics, marketing, and related systems that

facilitate the forward and reverse flow of materials, services, finances and

information from the original producer to final customer with the benefits of

adding value, maximizing profitability through efficiencies, and achieving

customer satisfaction (p. 706).

The author presents the Four Fundamentals in an attempt to concisely, yet

comprehensively, define the essence of SCM. It is aimed primarily at a practitioner

audience and aims to bring clarity and understanding to the issue. The avoidance of

jargon and complex language is an element of this. It takes into account the guidance

provided by New (1997):

On the one hand, too tight a definition of the supply chain concept artificially

closes off productive avenues of development. On the other hand, too loose a

definition allows the label to collapse into an amorphous study of everything (p.

16).

The Four Fundamentals seek to describe the main constituent elements of SCM, as well

as positioning SCM in the overall corporate strategic framework. It is informed by the

literature review as described in sections 2.2 – 2.6 (and as set out in Figure 2.2).

Furthermore, it aims to provide a definition which is intelligible irrespective of the

functional background, business sector or geographical location of the practitioner.

Finally, the Four Fundamentals need to be relevant to supply chain professionals

irrespective of their level of experience and/or seniority in industry. As shown in Figure

2.8, they relate to:

1. Setting SCM objectives;

2. SCM philosophy (based largely on the integration concept);

3. Managing supply chain flows; and,

4. Supply chain relationships.

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Figure 2.8: The Four Fundamentals of SCM

The following sections describe each of the Fundamentals in turn.

2.8 Fundamental One: Setting SCM Objectives

Figure 2.9 (below) highlights the role of Fundamental One in the context of the wider

construct.

Figure 2.9: Fundamental One of SCM

2.8.1 The Role of Objectives

The concept of management by objectives (MBO) has been written about for many

years (for example: Albrecht, 1979; Humble, 1971) and continues to attract attention

(Aggarwala, 2002). The basic concept of MBO is that agreed objectives form the basis

of the planning process. Setting objectives is of crucial importance for any planning

activity and is central to the successful creation and implementation of any plan for

several reasons, including the following:

• It focuses the attention of planners on the main targets to be achieved;

• It provides a sense of direction to those creating and implementing the plan; and,

• It provides a basis for post-hoc evaluation of the plan.

For these and other reasons, the creation of business objectives continues to play a key

role in lexicon of management training and education (see, for example, Rouillard,

2002)13.

13 Objective setting is often based on the SMART approach. Objectives should be Specific, Measurable, Alligned, Realistic and Time-based.

42

From an SCM perspective, the key objectives are:

• To meet or exceed the required or demanded customer service levels in targeted

markets/segments; and,

• To optimise total supply chain investment and cost.

This service/cost approach has long been regarded as central to SCM (Christopher,

1992)14.

2.8.2 Customer Service

Customer service has long been recognised as an integral component of a firm’s

marketing strategy to increase sales and profits (Lambert, 1992; Lambert and Sterling,

1993). Furthermore (and as noted earlier), customer service is becoming a key source of

differentiation or an order winning criterion in many sectors (Christopher, 2005). In

many sectors the importance of customer service relative to product quality (now

largely an order qualifier) and price (largely determined by the dynamics of supply and

demand in the market and subject to downward pressure in many sectors) has increased

(Sweeney, 2004). In other words, customer service has become a more critical element

of the overall marketing mix of organisations.

The key to the role of customer service in SCM lies in: (i) understanding customers’

needs and requirements in targeted markets/segments; and then, (ii) meeting (or

exceeding) these needs. To support this, the concept of an external and internal audit has

been suggested (Sterling and Lambert, 1989). The purpose of an external audit is

primarily to understand customer expectations and competition service levels. An

internal audit is used to assess the level of customer service provided and establish a

benchmark against which changes in service can be appraised. In assessing prior

research, Sterling and Lambert (1989) concluded that many of the past studies in this

area narrowly defined customer service and failed to measure it from a customer’s point

of view. Similarly, the National Institute for Transport and Logistics (NITL, 2001, p. 1)

noted that:

The first thing to ask is: ‘What do we mean by customer service?’. To some

organisations it means dealing with customer complaints; to others it is about

after-sales service; and, to yet others it is the ‘have a nice day’ attitude to

customers.

14 The title of this book Logistics and Supply Chain Management: Strategies for Reducing Costs and Improving Service reflects this.

43

They go on to suggest that in an SCM context customer service means “something quite

specific and includes all the factors involved in supporting and getting product to

customers” (NITL, 2001, p. 2). Table 2.4 shows the suggested constituent elements of

customer service. Most of these overlap with the elements suggested by Grant (2004)

based on the original work of LaLonde and Zinszer (1976).

Table 2.4: Elements of Customer Service Source: NITL (2001)

These elements form the basis of both the external and the internal audit processes.

Armed with the information yielded by these, companies can then develop market-

driven customer service strategies, which “deliver the level of service customers

actually want and are willing to pay for, and exploit company strengths and competitor

weaknesses” (NITL, 2001, p.2).

Before concluding this overview of customer service in the supply chain, it is worth

reiterating that increasing competition means that different market segments – and,

indeed, different customers – will increasingly have different customer service

requirements. This is in line with the MC concept discussed earlier. The original MC

concept (Davis, 1989) promoted the ability to provide individually designed products to

every customer. As customer service becomes a more critical order winning criterion,

the need to customise service levels to meet the requirements of different markets and

customers is likely to become more important. In an SCM context, therefore, the author

44

proposes an approach to MC which promotes the ability to provide individually

designed products, with individually incorporated service levels, to every customer. In

short, different customers may have different service requirements and these

requirements are likely to change over time. The key challenge is to design supply

chains which are sufficiently agile to meet these needs.

It is not just about improving service as the title of Christopher (1992) suggests. Rather

the objective needs to be, as pointed out earlier: to meet or exceed the required or

demanded customer service level in targeted markets/segments. This may result in a

requirement to improve service but, as pointed out by NITL (2001) for example, “it is

quite common to find companies incurring significant costs to provide a speedy

response to customers … customers often indicate that speed is not the issue”. In other

words, companies may be over-servicing customers in certain ways (e.g. length of order

cycle time), while failing to meet their needs in other, more critical, ways (e.g.

consistency of order cycle time). The key is to recognise that understanding customer

service requirements is the starting point in the supply chain design process. In other

words, as shown in Figure 2.10, a market-driven customer service strategy – based on

clearly understood customer requirements – sets the specification for integrated SCM.

The title of the paper by Korpela et al. (2001), “Customer Service Based Design of the

Supply Chain”, captures this approach very effectively.

Figure 2.10: Customer Service in Integrated SCM Performance Specification Source: Modified from Sweeney (2004)

2.8.3 Total Supply Chain Investment and Costs

As noted earlier, a significant amount of the cost base of companies is in the supply

chain and a key objective is to optimise this (and all other) expenditure. The emphasis

must be on total supply chain costs. The key issue is that a reduction in expenditure in

one part of the supply chain (e.g. purchasing) may result in an increase elsewhere (e.g.

45

inventory holding costs). Godsell and van Hoek (2009) allude to a number of practices

that are commonly used to improve discrete short-term measures of financial

performance at the expense of the overall supply chain. In line with overall SCM

philosophy it is important to take a supply chain wide view and to recognise the

inevitable trade-offs that need to be addressed. The trade-off approach to supply chain

costing has been a feature of the literature for many years (see, for example: Beckett,

1967; Schiff, 1972). Direct product profitability (DPP) represents an attempt to

determine the costs of moving products through the entire supply chain. As the name

suggests, DPP is essentially a technique for identifying the profit contribution of

individual products by taking into account the specific supply chain costs incurred by

particular items. As noted by Kurt Salmon Associates Inc. (1993) in the context of ECR

in the grocery industry, the handling and storage costs attributable to specific products

“had virtually wiped out” apparently high gross profits. However, traditional DPP

models ignored overhead and administrative costs which resulted in inaccuracies in

terms of determining real total costs. The development of activity-based costing (ABC)

in the 1980s was an attempt to assign overhead costs more accurately within

organisations (Cooper, 1988). However, as noted by LaLonde and Pohlen (1996):

“Despite the advantages of ABC, the methodology does not provide a satisfactory

solution to supply chain management” (p. 3). They note that the focus of ABC is on

internal activities and go on to state that:

These internal applications provide valuable information; however, they do not

enable the supply chain participants to determine where non-value-added activities

may exist in the supply chain, what high cost activities or processes to target for

continuous improvement or reengineering, what are the key factors driving supply

chain costs, or how to incorporate the notion of functional shiftability – to

strategically position logistics activities in the channel where the function can be

best performed in terms of cost, time, or quality (p. 4).

More recent work on time-driven ABC (TDABC) – see, for example, Everaert et al.

(2008) – adds another dimension to ABC by using time equations to estimate the time

consumed by activities across the supply chain.

The total cost of ownership (TCO) approach addresses some of these weaknesses. As

noted by Ellram (1995), this approach recognises that purchase price represents only a

portion of the total cost of acquiring an item. It seeks to identify total acquisition price

by including the costs of purchasing, stock holding, poor quality and delivery failure.

46

The previously cited paper by La Londe and Pohlen (1996) provides a useful supply

chain costing model. The authors note that:

Supply chain costing provides a mechanism for developing cost-based

performance measures for the activities comprising the key processes within the

supply chain. The capabilities provided by supply chain costing include the ability

to: determine the overall effectiveness of the supply chain, identify opportunities

for further improvement or reengineering, measure performance of individual

activities or processes, evaluate alternative supply chain structures or select supply

chain partners, evaluate effects of technology improvements (p. 5).

The six-step methodology15 incorporates elements of trade-off analysis, DPP and ABC.

The work of Bastl et al. (2010) extends this logic beyond the boundaries of the internal

supply chain by highlighting some of the limitations of current accounting practices in

an inter-organisational (or external supply chain) context.

The foregoing relates to supply chain costs. Similar logic can be applied to the issue of

investment in supply chain capability. In broad terms, such investment aims to improve

service performance and/or reduce costs. As noted by New (1995) the expenditure

involved can be significant and needs to be subject to the usual investment appraisal

processes to assess its value to the firm. Blankey (2008) present a useful conceptual

model of the financial gains associated with investment in supply chain management

technology (SCMT). Their work suggests that such investment leads to “improvement

in knowledge-intensive capabilities, which in turn lead to tangible operational or

functional improvements” (p. 176).

Finally, it should be noted that the objective is not just about reducing costs as the title

of the book by Christopher (1992) suggests. Rather the objective needs to be, as pointed

out earlier: to optimise total supply chain investment and cost. For example, it may be

necessary to commit investment to supply chain improvement and/or to increase

operating costs to meet (or exceed) customer service requirements. In any case, it is

important that total supply chain investment and cost is assessed as fully and as

accurately as possible. An understanding of the current situation provides a key input to

the supply chain design process. It could also be argued that the effectiveness of SCM

15 The steps are: analysing supply chain processes, breaking processes down into activities, identifying the resources required to perform an activity, costing the activities, tracing activity costs to supply chain outputs, and analysis and simulation.

47

implementation is assessed by measuring its impact on financial performance, as shown

in Figure 2.11.

Figure 2.11: Improved Financial Performance Measures the Effectiveness of SCM Source: Modified from Faulkner (2002)

2.8.4 The Service/Cost Conundrum

The foregoing raises the issue of how both customer service and financial

improvements can be achieved simultaneously – i.e., the so-called service/cost

conundrum. Conceptually, customer service improvements and cost reductions might

appear to be mutually exclusive; that is, service improvements require investment in

supply chain capability or increases in supply chain operating costs, and reductions in

expenditure cause service levels to be reduced. As noted by Stevens (1989), the

objective is to effect a balance between what are often seen as conflicting goals of high

customer service, low inventories and low unit cost. Two simple equations (both cited

in Christopher and Towill, 2000) provide a useful illustration of this issue.

1. Supply chain total PDP costs = Physical PDP costs + Marketability costs.

PDP is product delivery process. “Physical costs” include all production,

distribution and storage costs. “Marketability costs” include all obsolescence

and stock-out costs (Fisher, 1997).

2. Total value = (Quality × Service level)/(Costs × Lead time)

(Johansson et al., 1993).

The first equation indicates that costs associated with a failure to meet customer

requirements are just as much a part of total cost as the, often more easily measurable,

physical costs. To optimise total cost, therefore, customer service level demands need to

be met and physical costs need to be optimised. As pointed out by Christopher and

Towill (2000), the second equation is particularly helpful as it emphasises the futility of

improving one performance measure at the expense of worsening another. Furthermore,

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the equation re-introduces the concept of value. In the author’s view this is the key to

addressing the service/cost conundrum. The creation of value requires that all four

elements in the equation are tackled simultaneously. One approach to this is based on

the time-based SCM.

The concept of time compression in the supply chain is not new (see, for example: Stalk

and Hout, 1990; Towill, 1996; Mason-Jones and Towill, 1998). Indeed, the JIT

paradigm was based on the elimination of the seven forms of waste (or “muda”), one of

which is specifically, “waste of time in waiting” (Ohno 1988). Stalk and Hout (1990)

claimed that 95 per cent of the time consumed by business processes is wasted. Beesley

(1996) stated that the work of Warwick Manufacturing Group (WMG) in the mid-1990s

substantiates this figure in a UK context16. He goes further by pointing out that “in a

total supply chain context, most UK examples are struggling to achieve one per cent

value-adding time” (p. 301). The key is that supply chain time compression has the

potential to improve several of the elements of customer service (see Table 2.4) whilst

simultaneously reducing cost (on the basis that “time is money”). In this way the value

creation process is significantly enhanced.

Finally, the work of Fugate et al. (2010) is instructive in the context of the service/cost

conundrum. Their empirical research findings “contradict the traditionally assumed

‘either-or’ relationship between efficiency and effectiveness” and “indicate that

pursuing one does not preclude pursuit of the other, but rather the performance

dimensions perhaps reinforce each other” (p. 52).

2.8.5 Fundamental One: Summary and Some Concluding Points

Fundamental One recognises the importance of objectives and sets out clearly the two

generic SCM objectives. Any attempt at improving supply chain capability needs to be

based on improving performance in these two areas. Understanding customer

requirements in the marketplace and current supply chain cost elements and drivers then

becomes the starting point for the supply chain improvement/reengineering process. As

shown in Figure 2.10, the development of a market-driven customer service strategy

sets the specification for SCM. Improved financial performance measures the

16 Beesley (1996) notes that ‘The Time Compression Programme (TCP) exists as a partnership between industrial and academic parties of the Warwick Manufacturing Group (WMG, part of the University of Warwick). The programme was launched as a club scheme within the [UK Department of Trade and Industry] DTI’s Enterprise Initiative and is jointly funded by the DTI and industrial partners.’ (p. 303)

49

effectiveness of SCM (see Figure 2.11). Figure 2.12 shows how achievement of the two

objectives combines to create competitive advantage through integrated SCM.

Figure 2.12: Achieving Competitive Advantage through Integrated SCM Source: Modified from Faulkner (2002)

Furthermore, it should be noted that there will inevitably be target markets (or segments

or individual customers) which a company would like to service and where the cost of

doing so provides the opportunity to capture profitable market share. Similarly, there

will inevitably be others where the cost of doing so is prohibitive. This logic enables

market segmentation and targeting to be based on “cost-to-serve” (Gebert et al., 1996)

and “customer attractiveness” (Mortensen et al., 2008) models. The “margin-to-serve”

(M2S) models that have been used in some sectors in recent years take this logic a stage

further. Guerriero et al. (2008) suggest that such approaches – based on detailed and

specific customer data – enable “a more comprehensive customer profitability analysis

than the classical paradigm” (p. 389). In this way SCM, and the setting of clear SCM

objectives specifically, becomes a key element of corporate marketing planning.

Finally, it is worth returning to the concept of value, which could be regarded as linking

the cost/investment and customer service objectives. As noted by Lambert and Cooper

(2000) “the objective of SCM is to create the most value, not simply for the company,

but for the whole supply chain network including the end customer” (p. 82).

2.9 Fundamental Two: SCM Philosophy

Figure 2.13 (below) highlights the role of Fundamental Two in the context of the wider

construct.

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Figure 2.13: Fundamental Two of SCM

2.9.1 Supply Chain Integration

From the earlier discussion of both the historical evolution (section 2.3) and the

definitions of SCM (section 2.4) it is evident that the concept of integration lies at the

heart of SCM philosophy (see, for example: Christopher, 1992; New, 1996; Lambert,

2004). Cooper et al. (1997, p. 9) specifically describe SCM as “an integrative

philosophy”. Storey et al. (2006) in their discussion of the interlocking ideas and

propositions of SCM declare that, “the central underpinning ideas relate to alignment

and integration” (p. 758). Perhaps most tellingly, Pagell (2004) declares that “in its

essence the entire concept of SCM is really predicated on integration” (p. 460). If, as

Mentzer et al. (2001) suggested, SCM can be regarded as a management philosophy

then this philosophy is concerned first and foremost with integration. The widely cited

work of Bowersox and his collaborators at Michigan State University (see, for example,

Bowersox et al., 1999), which describes a framework of six competencies (the Supply

Chain 2000 Framework) that lead to world class performance in logistics and SCM,

supports this view. The six competencies17, grouped into three areas (operational,

planning and relational) are all concerned with integration. A detailed schematic view of

these competencies is shown in Appendix 6.

It should be recognised that the integration concept operates at a number of different

levels. For example, the work of Fawcett and Magnan (2002) identified four levels of

integration in practice:

1. Internal cross-functional integration;

2. Backward integration with valued first-tier suppliers;

3. Forward integration with valued first-tier customers; and,

4. Complete backward and forward integration (“from the supplier’s supplier to

the customer’s customer”).

17 Operational Integration: customer integration, internal integration, supplier integration; Planning Integration: technology and planning integration, measurement integration; Relational Integration.

51

Furthermore, and as noted earlier, Harland et al. (1999) classified research in this area

according to the level of integration between supply chain activities. The four levels are:

1. Internal level, which considers only on those activities which are entirely

internal to the focal company;

2. Dyadic level, which considers single two-party relationships (between, for

example, supplier and manufacturer or manufacturer and distributor/retailer);

3. Chain level, which encompasses a set of dyadic relationships including a

supplier, a supplier's supplier, a customer and a customer's customer; and,

4. Network level, which concerns a wider network of operations.

In each of these cases, the first level relates to integration of activities and processes

which are carried out within a single organisation (i.e. internal or micro- or intra-firm

supply chain integration). The others describe varying degrees of integration of

activities which span the boundaries of organisations (i.e. external or macro- or inter-

firm supply chain integration), with the last one of Fawcett and Magnan (2002) often

being viewed as the theoretical ideal. The following sections discuss internal and

external integration in more detail.

2.9.2 Internal Chain Integration

The phrase “internal supply chain” has appeared in the literature (Huin et al., 2002) to

describe worked aimed at breaking down the barriers between functions within

organisations. To establish a framework for describing the key functions of a typical

internal supply chain, New’s comment (1997, p. 17) that SCM “revolves around the

buying, making, moving and selling of ‘stuff’” is quite instructive. It is in line with the

“buy–make–move–sell” model of product supply chains (NITL, 2000) introduced

earlier. For the purposes of this section the author has added a fifth element, namely the

“store” activity. This has been done to ensure that all activities associated with the

design and management of warehouses and other storage locations are given due

recognition in the framework. Warehouse management has long been regarded as an

integral element of the logistics activity of firms (see below) and a significant amount of

specialist knowledge and expertise in this area has been developed over the years.

Essentially, “move” has been disaggregated into separate “move” and “store” elements,

reflecting the specific characteristics of each of these activities.

52

Most businesses – certainly manufacturing-based business – can be described in terms

of the five functions: buy, make, store, move and sell. This is what is referred to as the

internal (or micro- or intra-firm) supply chain as shown in Figure 2.14.

Figure 2.14: The Internal Supply Chain Source: Sweeney (2007, p. 50)

Traditionally these functions have often been measured, and therefore managed, in

isolation, often working at cross purposes. As succinctly noted by Storey et al. (2006)

this traditional approach is analogous to a relay race with responsibility being passed

from one function to another. SCM means thinking beyond the established boundaries,

strengthening the linkages between the functions, and finding ways for them to pull

together. A recognition that the “whole is greater than the sum of the parts” calls for

more effective integration between purchasing and procurement (buy), production

planning and control (make), warehouse management (store), transport management

(move) and customer relationship management (sell), as illustrated in Figure 2.15.

Figure 2.15: Integrating the Internal Supply Chain Source: Sweeney (2007, p. 50)

This shift, away from a functional orientation towards a more company-wide focus, is in

line with the early stages of the various models of SCM historical evolution introduced

in section 2.3. It is also analogous to the SCO approach of Mentzer et al. (2001) in the

sense that SCO at firm level, as manifested in high levels of internal integration, could

be regarded as a prerequisite for SCM, as manifested in high levels of external

integration (see section 2.9.3). van Hoek et al. (2008) also recognise this phenomenon:

53

Deficient interaction between logistics and peer functions has serious implications

within and beyond the firm as research strongly suggests that internal alignment is

an important antecedent to alignment between supply chain partners (p. 110).

Nonetheless, the desirability of achieving seamless integration is not something which

is unique to SCM. Organisations have long realised the need for company-wide

approaches to organisational design and redesign. The development of systems

engineering approaches to manufacturing system redesign in the 1970s and 1980s (see,

for example Hitomi, 1996) was followed by the focus on organisational re-engineering,

often based on business processes, in the 1980s and 1990s (Hammer and Champy,

1993). A common feature of these approaches was a recognition that “the whole is

greater than the sum of the parts”. In other words, optimising subsystems (whether those

subsystems are functional departments, production sites or individual processes in the

manufacturing cycle) can result in a sub-optimised total system. Lack of efficiency

and/or effectiveness is often a result of the poorly designed interfaces between

subsystems rather than any inherent subsystem weaknesses. There are numerous

examples of companies which have generated significant improvements in competitive

advantage as a result of the application of this “total systems” thinking (see, for

example: Checkland and Scholes, 199918; Sweeney, 1999).

Finally, elements of two earlier SCM definitions highlight some of the key

organisational issues associated with internal integration. Monczka et al. (1998) noted

that SCM adoption requires traditionally separate materials functions to report to a

manager with overall responsibility for coordination of the entire materials process. In a

similar vein, Houlihan (1988) suggested that in an SCM environment, responsibility for

the various components of the supply chain should not be fragmented and relegated to

functional areas (e.g. manufacturing, purchasing, distribution and sales). However, a

study by Ellinger (2002) recognises that despite its well documented advantages the

extent of internal integration is limited. His study, which focussed specifically on

integration between logistics and marketing functions, concludes that

“marketing/logistics interdepartmental relations are only moderately effective” (p. 93).

18 Peter Checkland is particularly associated with ‘Soft Systems Methodology’ (SSM).

54

2.9.3 External Chain Integration

Every product or service is delivered to the final consumer (the only source of “real”

money in the chain) through a series of often complex movements between companies

which comprise the complete chain. An inefficiency anywhere in the chain will result in

the chain as a whole failing to achieve its true competitive potential. In other words,

supply chains are increasingly competing with other supply chains rather than, in the

more traditional axiom, companies simply competing with other companies. Vachon et

al. (2009) capture this concept very effectively by stating that “organizations are

competing not only with their internal capabilities but also on their abilities to leverage

capabilities in the supply chain” (p. 322). In this context, the phrase “supply chain” is

used to indicate that the chain is only as strong as its weakest link. Lambert et al. (1998)

suggested that “much friction, and thus waste of valuable resources results when supply

chains are not integrated, appropriately streamlined and managed”. (p. 14). This concept

of inter-company “friction” is useful in conceptualising the need to replace

fragmentation with integration.

The simplistic representation in Figure 2.16 of the external (or macro- or inter-firm)

supply chain shows materials flowing from the raw material source through the various

stages in the chain to the final consumer. Money (i.e. funds) then flows back down the

chain. The point is that every link matters and that value is added, and profit generated,

at each link along the way.

Figure 2.16: The External Supply Chain Source: Sweeney (2007, p. 52)

This aspect of Fundamental Two is central to most of the definitions of SCM

introduced earlier. As Houlihan (1988) notes, the supply chain is viewed as a single

(i.e. integrated) process. In other words, the various links in the chain need to function

55

in as seamless a manner as possible. Monczka et al. (1998, p. 78) refer to the use of “a

total systems perspective across multiple functions and multiple tiers of suppliers”. The

reference to “multiple functions” alludes to internal integration; extending this to

“multiple tiers of suppliers” introduces the external integration concept, albeit in the

rather limited sense of backward integration with suppliers. As noted earlier, the

theoretical ideal is complete backward and forward integration (“from the supplier’s

supplier to the customer’s customer”).

It is important to note that the representation in Figure 2.16 corresponds to the “chain

level” in the classification of Harland (1996). In reality most “chains” are more like the

“network level” with multiple suppliers and customers across the various tiers in the

“chain”. Lambert et al. (1999) made reference to:

• Horizontal structure – this refers to the number of tiers across the supply chain;

• Vertical structure – this refers to the number of suppliers/customers represented

within each tier; and,

• Horizontal position – this refers to where the focal company is positioned

within the chain (e.g. close to the initial source of supply or nearer to the

ultimate customer).

Thus, most “supply chains” are in reality three dimensional networks of organisations.

In view of this, Lambert and Cooper (2000) suggest that “the ultimate success of the

single business will depend on management’s ability to integrate the company’s

intricate network of business relationships” (p. 65). Walters (2008, p. 724) puts this

starkly by stating that:

It is unlikely that the “good old days” – if that is what they were – will return. The

realistic organisation is one that will adapt to the new order of business

relationships and seek to form network alliances and partnerships within and out

with national boundaries.

It was noted earlier that “complete backward and forward integration” as postulated by

Fawcett and Magnan (2002) might be viewed as the theoretical ideal. However, in

reality various degrees of integration between upstream and downstream organisations

will exist. In this context, Frohlich and Westbrook (2001) proposed the concept of “arcs

of integration” (see Figure 2.17).

56

Figure 2.17: Arcs of Integration Source: Frohlich and Westbrook (2001, p. 187)

The direction of the segment refers to the direction of integration (i.e. upstream or

downstream) while the degree of the arc indicates the level or extent of integration

(from “no integration” to “extensive integration”). Similarly, Bask and Juga (2001)

proposed the concept of “semi-integrated” supply chains. They suggest that “a fully

integrated supply chain sounds impressive but says little” (p. 150). By way of

illustration they note that:

The relationships between organisations are subtle and complex and no one recipe

exists on how the supply chains achieve best performance. For some companies,

tight integration is the answer under regimes like efficient consumer response,

quick response, etc. For others, intensive integration may be the goal in selected

areas of SCM, while in other areas it can be beneficial to strive for limited

integration. Simultaneous properties of tight and loose control are needed as is

suggested in the notion of semi-integrated supply chains (p. 149).

The work of Fabbe-Costes and Jahre (2007) is in line with this concept. They identify a

“differentiated” approach to supply chain integration which “can help companies to

identify and then to focus on a limited number of integration factors” (p. 847).

2.9.4 Performance Measurement

It was noted earlier that traditionally supply chain activities have often been measured,

and therefore managed, in isolation. The contention implicit in this statement is that

fragmented approaches to measurement result in fragmented approaches to

management. This is line with the “what gets measured gets done” axiom. In relation to

internal integration, Ellinger (2002) reinforces this point by contending that:

If functions are very interdependent in their work, it is counterproductive to base

evaluation and reward systems on individual performance. The nature of such

work demands compatible systems such as team-based pay and compensation,

57

performance appraisal and accountability at the team level, and recognition for

team results (p. 87).

One of the case companies studied by Storey et al. (2006) provides a good illustration of

this point in relation to external integration. The company in question had measures in

place that showed that they consistently achieved their three-day delivery target.

However, the large majority of orders were delivered after the date the customer had

originally requested and on average they were 16 days late. The problem was that only

that part of the supply chain over which they had control was being measured. As

Brewer and Speh (2000) noted, performance metrics “are not always focused on

measuring, motivating, and optimising inter-firm and intra-firm performance” (p. 82).

Gunasekaran et al. (2004) captured the challenge very effectively by noting that:

Many companies have not succeeded in maximizing their supply chain’s potential

because they have often failed to develop the performance measures and metrics

needed to fully integrate their supply chain to maximize effectiveness and

efficiency (p. 335).

Business performance measurement systems (PMS) generally, and supply chain

performance measurement specifically, are subjects which have been the subject of

extensive discussion in the literature for many years. The amount of work in the area of

supply chain performance measurement specifically is illustrated by Fabbe-Costes and

Jahre (2007) who note that a search in EBSCO-Business Source Complete identified

over 700 peer-reviewed articles with a combination of “performance” and “supply chain

management” in the title, abstract and/or keywords. Morgan (2007) provides a useful

overview of the historical development of supply chain performance measurement (see

Figure 2.18).

58

Figure 2.18: Phases of Development of Supply Chain Performance Measurement Source: Morgan (2007, p. 525)

The general trend over time has involved a shift away from the use of purely financial

metrics with the importance of the supply network emerging in the final and current

phase. This recognises that customer satisfaction can only come from the supply chain

functioning effectively in totality (both processes and process interfaces).

Several authors have pointed out some of the challenges associated with effective

supply chain performance measurement and some of the weaknesses inherent in current

approaches. Chow et al. (1994) discuss how logistics performance has been and could

be conceptualised. van Hoek (1998) suggested that vertical disintegration has resulted in

a new scenario as much of a firm’s competitive capability is no longer under its direct

operational control. Beamon (1999) noted that “current supply chain performance

measurement systems are inadequate because they rely heavily on the use of cost as a

primary (if not sole) measure” (p. 280). Gunasekaran et al. (2001) noted the lack of a

“balanced approach” and the lack of a “clear distinction between metrics at strategic,

tactical and operational levels” (p.72). Lambert and Pohlen (2001) suggested that “in

most companies, the metrics that management refer to as supply chain metrics are

primarily internally focused logistics measures” and that “these metrics do not capture

how the overall supply chain has performed” (p. 1). In the context of the wider external

supply chain (or extended enterprise), Lehtinen and Ahola (2010) point out that “the

main shortcomings of the PMS were related to a lack of external measures, especially

those that focus on suppliers, and insufficient integration at the extended enterprise

level” (p. 196).

59

In 1994, Caplice and Sheffi (1994) presented a taxonomy of logistics performance

metrics, organized by process rather than by function, with the metrics evaluated using

established criteria. Since then, a number of frameworks have been proposed which aim

to address fragmentation in supply chain performance measurement, as well as some of

the other weaknesses noted above. Three such approaches provide some useful

foundations for effective measurement in a SCM context.

Balanced Scorecard

Brewer and Speh (2000) demonstrated how the balanced scorecard (BSC) framework

developed originally by Kaplan and Norton (1996) could be adopted in a SCM context.

The balanced scorecard is an attempt to balance the inclination to overemphasise purely

cost and other financial metrics with measures related to other drivers of long-term

profitability. It does this by using customer satisfaction, innovation and learning and

business process metrics, along with purely financial metrics. Brewer and Speh (2000)

propose that the supply chain perspective can be embedded within the internal business

process dimension of the scorecard through the use of both “integrated” and “non-

integrated” measures. They cite cash-to-cash cycle time as an example of the former in

that it embraces several functions across several organisations. The latter, in contrast,

provide diagnostics on where problems are occurring within individual functions and

firms. Zimmermann and Seuring (2008) extend this thinking to the wider external

supply chain is their discussion of the use of the BSC in an inter-organisational context

based on two case studies.

Lambert and Pohlen Framework

Lambert and Pohlen (2001) proposed a framework that aligns performance at each

dyadic link (i.e. supplier-customer pair) within the supply chain. The framework begins

with the linkages at the focal company and moves outward a link at a time. The link-by-

link approach provides a means for aligning performance downstream and upstream

“with the overall objective of maximizing shareholder value for the total supply chain as

well as for each company” (p. 8). The framework comprises seven steps:

1. Map the supply chain from point-of-origin to point-of-consumption to identify

where key linkages exist;

60

2. Use the customer relationship management (CRM) and supplier relationship

management (SRM) processes to analyse each link (customer-supplier pair) and

determine where additional value can be created for the supply chain;

3. Develop customer and supplier profit and loss (P&L) statements to assess the

effect of the relationship on profitability and shareholder value of the two firms;

4. Realign supply chain processes and activities to achieve performance objectives;

5. Establish non-financial performance measures that align individual behaviour

with supply chain process objectives and financial goals;

6. Compare shareholder value and market capitalisation across firms with supply

chain objectives and revise process and performance measures as necessary;

and,

7. Replicate steps at each link in the supply chain.

This framework represents a methodology for overall supply chain improvement with a

novel approach to performance measurement at its core.

Gunasekaran et al. Framework

Gunasekaran et al. (2004) proposed a measurement framework by considering strategic,

tactical and operational measures for the four supply chain activities/processes of plan,

source, make/assemble and deliver. An overview of the framework is shown in Figure

2.19 (below). The authors suggest that this framework provides “a starting point for an

assessment of the need for supply chain performance measurement” (p. 344). In other

words, the framework does not provide a usable tool but rather provides a foundation

which can be developed and built upon.

Finally, Beamon (1999) presents four characteristics of effective performance

measurement systems. Systems should be: inclusive (i.e. measure all pertinent aspects);

universal (i.e. allow for comparison under various operating conditions); measurable

(i.e. data is available); and, consistent (i.e. measures used should reflect organisational

goals).

61

Figure 2.19: Supply Chain Performance Metrics Framework Source: Modified from Gunasekaran et al. (2004)

2.9.5 Fundamental Two: Summary and Some Concluding Points

Virtually all contemporary definitions of SCM place a strong emphasis on the need for a

shift from traditional supply chain architectures, which were often characterised by

fragmentation, to more effective configurations, which need to replace fragmentation

with integration. This is true both in relation to internal and external chains.

Fundamental Two recognises this fact. The achievement of high levels of integration

has implications for the design of organisational structures and supply chain

architectures. Kemppainen and Vepsalainen (2003) suggest that in the future this is

“expected to result in a new structure of demand-supply networks, in this paper called

the encapsulated network, with shared technology and systems, extended decision rights

and non-territorial services” (p. 716). There is evidence to suggest that higher levels of

SCI positively impact on performance. For example, Elmuti et al. (2008) conclude that

the results of their longitudinal study in the US:

show positive and substantial improvements in overall performance as a result of

integration and coordination of the internal functions within the firm and

effectively linking them with their external suppliers (p. 151).

As noted earlier, “leading edge” companies may well have adopted this philosophy to

varying degrees but there is a need to understand its role and impact in the wider

business community. For example, the recent work of Fabbe-Costes and Jahre (2008)

concludes that:

62

In going behind the rhetoric of ‘integration is always best’, we have shown that

‘evidence’ cannot be taken for granted and that much more research is needed in

particular with regard to the impact of extended inter-organisational SCI on supply

chain performance (p. 145).

Finally, moving from fragmented to more integrated approaches inevitably requires

changes to the ways in which both internal and external customer and supplier

relationships are created and managed (see Fundamental Four). For example, the

empirical work of Forslund and Jonsson (2009) in a Swedish context suggests that

issues such as lack of trust and poor communication structures can act as obstacles to

effective inter-firm integration.

2.10 Fundamental Three: Managing the Flows

Figure 2.20 (below) highlights the role of Fundamental Three in the context of the

wider construct.

Figure 2.20: Fundamental Three of SCM

2.10.1 Supply Chain Flows

Forrester’s pioneering article from over half a century ago (Forrester, 1958) established

a specific link between corporate success and the interactions between five flow

systems:

• Information;

• Materials;

• Money;

• Manpower; and,

• Capital equipment.

Since then, the concept of different flows interacting with each other, and the need to

proactively manage these flows, is a theme which has been the subject of much research

and discussion. In the 1980s, for example, Jones and Riley (1985) stated that “SCM is

concerned with the total flow of materials from suppliers through end users” and

63

Stevens (1989) suggested that the objective of SCM is “to synchronise the requirements

of the customer with the flow of materials from suppliers”. More recently, Christopher

and Ryals (1999, p. 6) emphasised the importance of managing “the flow of product and

related information”. In essence, for a supply chain to achieve its maximum level of

effectiveness and efficiency, material flows, money flows and information flows

throughout the entire chain must be managed in an integrated and holistic manner,

driven by the overall service and financial objectives.

It is worth noting that Forrester (1958) alluded to five flows (manpower and capital

equipment being the additional two). Croom et al. (2000) also referred to five flows

(knowledge and technology being the additional two). In a sense, knowledge flow could

be regarded as the 21st Century incarnation of manpower flows (knowledge flow being a

consequence of interaction between people) and technology flow the 21st Century

incarnation of capital equipment flows. In the context of defining the essence of SCM,

however, the exchanges that are focussed upon are the material, money and information

flows, as these are viewed as being the critical elements of supply chain operations

planning and control.

The view of an external chain shown in Figure 2.16 indicates the way in which material,

money (funds) and information flow between the companies which participate in the

chain. Similar flows typically occur between the functions which comprise the internal

chain. The following sections provide an overview of some of the issues involved in

managing these material, money and information flows.

2.10.2 Managing Material Flows

Figure 2.16 shows the flow of material (“products and services”) from the source of

materials forward (or upstream) to the final consumer in the external chain. It should be

noted that there is also a backward (or downstream) flow of materials, traditionally

associated with product returns but increasingly with recycling, packaging and end-of-

life products. The growing importance of reverse logistics in recent years has sharpened

the focus on management of these flows. For example, “Return” is the process most

recently incorporated into the SCOR model (Supply Chain Council, 2009).

Much SCM theory has its origins in the well-established field of materials management.

The evolution of materials management in many ways mirrors the evolution of SCM as

64

a whole. For example, the focus on manufacturing inventory reduction in the 1960s and

1970s (see Figure 2.4) became an integral part of the broader field of materials

management in the 1980s and early 1990s (Battaglia, 1994). The need for more

integrated approaches to materials management across the supply chain became a strong

focus in the 1990s (see, for example, Hines, 1993). It could be argued that the whole

field of logistics, with its origins in a military context, is fundamentally concerned with

the efficient and effective management of the flow of materials through supply chains.

A common feature of definitions of logistics (such as that of the CSCMP (2009) – see

section 2.4.3) is that they focus primarily on the management of material flows within a

supply chain. Furthermore, they tend to regard logistics as one component element of

the broader field of SCM. However, whilst this might be the most common approach to

defining logistics and relating it to SCM, it is worth noting that there are a number of

different schools of thought. As noted by Lummus et al. (2001, p. 427), “What is not

always clear is how logistics differs from … supply chain management”. Similarly,

Larson and Halldorsson (2004, p. 18) point out that, “there is lack of agreement on how

SCM is related to logistics”.

Larson and Halldorsson (2004) identify four conceptual perspectives on SCM versus

logistics:

1. Traditionalist;

2. Re-labelling;

3. Unionist; and,

4. Intersectionist.

Their schematic representation of the perspectives contained in their paper is shown in

Figure 2.21. The traditionalist school positions SCM in logistics: that is, SCM is just

one small part of logistics. The re-labelling perspective simply renames logistics: what

was logistics is now SCM!

65

Figure 2.21: Perspectives on SCM versus Logistics Source: Larson and Halldorsson (2004, p. 19)

The unionist perspective treats logistics as a part of SCM: SCM completely subsumes

logistics. Finally, the intersectionist perspective is described as follows by Larson and

Halldorsson (2004, p. 21):

The intersection concept suggests SCM is not the union of logistics, marketing,

operations management, purchasing and other functional areas. Rather, it includes

strategic, integrative elements from all of these disciplines. For instance, in the

purchasing area, negotiating a long-term arrangement is a strategic element and

transmitting a purchase order is tactical. The supply chain manager would be

involved in the negotiations, but not the purchase order transmission. Similarly, in

the logistics area, hiring a third-party logistics (3PL) provider is a strategic

decision, while picking and packing in the warehouse are tactical. At the

intersection, SCM co-ordinates crossfunctional efforts across multiple firms. SCM

is strategic, not tactical.

Whilst each of these approaches is valid in its own way, the research of Larson and

Halldorsson (2004) indicates that the unionist view is the most widely adopted by

scholars. The empirical evidence of Lummus et al. (2001) suggests a similar perspective

amongst practitioners. Based on a small sample of manufacturers, retailers and 3PLs

they conclude that:

Logistics is generally viewed as within one company, although it manages flows

between the company and its suppliers and customers. Supply chain management

includes the logistical flows, the customer order management and production

processes and the information flows necessary to monitor all the activities at the

supply chain nodes (p. 431).

Logistics

SCM

Logistics

SCM

Logistics

Logistics

SCM

SCM

X

Traditionalist Re-labelling

Unionist Intersectionist

Logistics

SCM

Logistics

SCM

Logistics

Logistics

SCM

SCM

Logistics

Logistics

SCM

SCM

X

Traditionalist Re-labelling

Unionist Intersectionist

66

In any event, ensuring that the right materials are in the right part of the supply chain at

the right time remains an integral element of the SCM field.

2.10.3 Managing Money Flows

In a supply chain, money flows from the ultimate consumer of the product back down

through the chain. The timing of these flows is critical to ensuring that supply chain

companies maintain the ability to meet their ongoing operational expenditure

commitments. The working capital cycle – a well-known construct in the field of

financial management (see, for example, Keown et al., 2004) – provides a useful

representation of financial flows in a supply chain (see Figure 2.22).

Figure 2.22: The Working Capital Cycle Based on Keown et al. (2004)

In relation to performance measurement, one financial metric used within the SCOR

model is cash-to-cash cycle time (Supply Chain Council, 2009). This is defined by

adding the number of day’s worth of inventory held to the number of days of

receivables outstanding and then subtracting the number of days of payables

outstanding. The result is a measure of the number of days of working capital that are

tied up in managing the supply chain. The work of Randall and Farris (2009) shows

how metrics such as cash-to-cash cycle times that have traditionally been applied at firm

level can be logically extended to the external supply chain to create “a potential tool to

align and improve the financial performance of collaborating firms” and go on to note

that “during economic downturns and times of tight credit proactively managing

financials across the supply chain may be the only way some suppliers remain afloat”

(p. 669).

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2.10.4 Managing Information Flows

As shown in Figure 2.16 information flows in the supply chain are bidirectional. From

an SCM perspective, it can be argued that managing the information flows is the most

critical of the activities described in this section. This is because the flow or movement

of materials or money is usually triggered by an associated information movement.

Effective management of material and money flows is, therefore, predicated upon the

effective management of the related information flows. For example, Kaipia (2009)

shows how the balance between material and information flows is influenced by

selection of a supply chain planning mechanism. It is not surprising, therefore, that there

is a huge interest in this area in the literature (see, for example: Evans et al., 1993;

Mason-Jones and Towill, 1998; Giminez and Lourenco, 2008). The bullwhip effect to

which Forrester (1958) referred is essentially the product of poor information

management in the supply chain and leads to a requirement to hold excessive levels of

inventory. The corollary of this is that if levels of demand visibility are high throughout

the supply chain then inventory levels can be reduced. As Christopher (2005) notes,

good information effectively becomes a substitute for high levels of inventory.

Simatupang et al. (2002) illustrate the importance of effective information management

using the example of WalMart. WalMart shares point of sales data (for example, sales

and stocking data) with key suppliers, which enables these suppliers to, for example,

differentiate popular from slow-moving items and to respond appropriately. This

coordination “dramatically increases product availability and reduces inventory costs”

(Simatupang et al. 2002, p. 289). In this way the twin SCM objectives (Fundamental

One) of improved customer service (in the form of increased product availability) and

optimised costs (in the form of reduced inventory costs) are achieved.

Recent years have also seen rapid developments in the ICT used to facilitate SCM.

McDonnell et al. (2004) proposed a taxonomy of supply chain ICT solutions which

identifies four primary categories as follows:

1. Point solutions - used to support the execution of one link (or point) in the chain

(e.g. warehouse management systems or WMS);

2. “Best of breed” solutions - where two or more existing stand-alone solutions

are integrated, usually using middleware technology;

3. Enterprise solutions - based on the logic of enterprise resource planning (ERP),

these solutions attempt to integrate all departments and functions across a

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company into a single computer system that can serve all those different

departments’ particular needs; and,

4. Extended enterprise solutions (XES) - refers to the collaborative sharing of

information and processes between the partners along the supply chain using the

technological underpinnings of ERP.

The move away from point towards enterprise solutions in many ways reflects the shift

from internal and functional, to external and process, management orientations in recent

years (as highlighted in section 2.5). Other technologies, in particular electronic data

interchange (EDI) and the Internet19, have enabled supply chain partners to use common

data. As noted by Christopher (2000), this facilitates supply chain agility as companies

can act based on “real demand, rather than be dependent upon the distorted and noisy

picture that emerges when orders are transmitted from one step to another in an

extended chain” (p. 39). Thus, effective adoption of ICT becomes a key enabler of

integration in the supply chain requiring managers to – as noted by Vanpouckle et al.

(2009) – “selectively invest in IT according to an overall supply chain integration

strategy” (p. 1213). The recent structured literature review of Zhang et al. (2011)

suggests “that generally, there is a positive direct or indirect effect of ICT on

performance and SCM” (p. 1215).

2.10.5 Fundamental Three: Summary and Some Concluding Points

Fundamental Three provides the key to putting the philosophy of SCM, as outlined in

Fundamental Two, into operational practice. It highlights the specific activities that

need to take place, and places a strong emphasis on the need for an integrated and

holistic approach to their management. A stepwise decomposition of the buy–make–

store–move–sell model, as carried out in the SCOR model, identifies in more detail

what these activities are and how they interact. Indeed, most of the activities typically

seen by companies as being part of SCM relate to the planning and control of these

elements of supply chain functionality (Fawcett and Magnan, 2002). In this context,

“planning and control” is concerned with material, money and information throughout

the supply chain.

19 The paper of Giminez and Lourenco (2008) provides a useful overview of the impact of the Internet on various processes that SCM embraces.

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2.11 Fundamental Four: Supply Chain Relationships

Figure 2.23 (below) highlights the role of Fundamental Four in the context of the wider

construct.

Figure 2.23: Fundamental Four of SCM

2.11.1 Supply Chain Relationship Management

The need to replace fragmentation with integration (as advocated in Fundamental Two)

and the holistic approach to flow management (as advocated in Fundamental Three)

requires a reappraisal of the way in which both internal and external customer/supplier

relationships are created and managed. As noted by Sweeney (2005, p. 108): “SCM is

not a ‘zero-sum’ game based on adversarial relationships. Rather, it needs to be a ‘win–

win’ game based on partnership approaches”. This point is relevant to the interactions

between the key internal supply chain functions of buy, make, store, move and sell, as

well as to relationships between an organisation and its external customers and

suppliers. Several of the SCM definitions in the literature highlight the importance of

relationship management. For example, Monczka et al. (1998, p. 78) refer to the

requirement for “joint relationships with suppliers across multiple tiers”. La Londe and

Masters (1994) suggest that supply chain strategy includes, “… two or more firms in a

supply chain entering into a long-term agreement; … the development of trust and

commitment to the relationship; … the integration of logistics activities involving the

sharing of demand and sales data” (p. 38). The CSCMP definition (CSCMP, 2009)

specifically embraces the concept of “co-ordination and collaboration with channel

partners”. Lambert et al. (1998) go even further by suggesting that the management of

relationships across the supply chain is itself being referred to as supply chain

management. A recent study of over 200 US manufacturing companies by Lado et al.

(2011) supported this view and concluded that supply chain partners must “continually

develop and leverage the relational competencies in order to enhance firm

competitiveness” (p. 202). Finally, it should be noted that business-to-business (B2B)

relationships have long been a subject of interest amongst marketing researchers and

that a large body of associated literature exists (see, for example: Flint et al., 1997;

Gummersson, 1999; Payne and Frow, 2004).

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2.11.2 Types of Relationships

Lamming (1993) highlighted the need to move: from “zero-sum” to “win–win” games;

from competitive to collaborative approaches; and, from adversarial to partnership

relationships (and beyond20). As noted in relation to Fundamental Two, various degrees

of integration between upstream and downstream organisations exist depending upon a

range of factors. It is not surprising, therefore, that in reality many different possible

relationship types exist. Quinn and Hilmer (1994) categorised relationships based on the

trade-off between the need for flexibility and the need for control, as shown in Figure

2.24. Choosing the appropriate relationship model is a key issue in any given situation.

Figure 2.24: Categories of Customer/Supplier Relationship Source: Modified from Quinn and Hilmer (1994)

Croom et al. (2000) identified ten variables which influence the nature of relationships

between actors in a network. These include the attitude and commitment to

collaborative improvement programmes, legal issues and the degree of power and

influence of each party. It is widely recognised that, as noted by Lambert and Cooper

(2000), “the closeness of the relationship at different points in the supply chain will

differ” (p. 69). In other words, it is not a case of “one size fits all”. A key management

decision involves determination of the appropriate relationship that best suits a

particular set of circumstances. With this in mind de Leeuw and Fransoo (2009)

postulated a conceptual model that may be used as the basis of a roadmap for

determining the appropriateness of different types of supply chain collaboration.

2.11.3 The Impact of Vertical Disintegration

As noted in section 2.2.3, companies are increasingly focussing on what they regard as

their core activities or competencies. The corollary of this is that activities regarded as

20 As suggested in the title of his book: Beyond Partnership: Strategies for Innovation and Lean Supply.

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“non-core” are being outsourced with key supply chain activities such as transportation,

warehousing and manufacturing outsourced to third-party organisations. This has

resulted in a shift away from the traditional model of “control through ownership”

towards models which are based on management and control through effective supply

chain relationship management (see, for example, Christopher, 2005). In short, as this

process of vertical disintegration has taken place so supply chain architectures have

become more virtual. For example, at the stage referred to by Gattorna et al. (2003) as

“Virtual Supply Chains” (see Figure 2.5), there is an emphasis on “Networks of

Businesses” and “Virtual Network Consortia” (VNC). As noted in section 2.2.3, the

traditional fully vertically integrated approaches are being replaced by contemporary

fully virtually integrated approaches – a new FVI is evolving. This has sharpened the

focus on the need for the creation of appropriate relationship forms throughout the

supply chain, as well as on their effective management.

2.11.4 Strategic Partnering

Much of the literature presents the partnership approach as an ideal. For example,

Harland et al. (1999, p. 659) argued that: “The search for closer co-operation and

integration is evident not only with customers; suppliers are increasingly being viewed

as partners, becoming more deeply involved in co-operative problem solving”. In a truly

strategic partnership approach a number of features should be evident (Rothery and

Robertson, 1995), as follows:

• Senior management from both firms meet regularly;

• Payments relate to specified business outcomes or pre-agreed levels of

performance rather than fixed work volumes;

• Outsourcing contracts usually last for five years or longer;

• Disclosure takes place of costs and margins between both the parties;

• Each is involved in the other partner’s strategic planning;

• Partner is not chosen on the basis of a competitive tendering process;

• Each partner searches for ways to reduce total costs of the partnership; and,

• Each partner must genuinely add value.

However, as noted by Stone (2002, p. 15): “In reality, few partnerships are

arrangements between equal parties.” Fernie (1998) went further by noting that there is

an impression that companies enter some form of partnership but in many cases lip

service is being paid to the idea. Lamming (1993) also referred to the “lip service” trap

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in relation to customer/supplier partnerships in the sense that “if companies talk about it

for long enough, they begin to believe they are doing it”.

2.11.5 The People Dimension

It is important to note that relationships are in essence about people. For example,

Grieco (1989) recognised that effective SCM rests on the so-called “twin pillars” of

trust and communication. Ellinger (2002) identifies the role of “predominantly informal

processes based on trust, mutual respect and information sharing, the joint ownership of

decisions, and collective responsibility for outcomes” (p. 86). Lambert et al. (1998)

proposed that the fundamental management components of SCM can be classified as

shown in Figure 2.25 (below).

Figure 2.25: Components of SCM Source: Lambert et al. (1998, p. 10)

The “physical & technical management components” might be characterised as the

“hard-wiring” of the supply chain while the “managerial and behavioural management

components” relate to the “soft-wiring”. The latter components are all concerned with

the people dimension of SCM and the model indicates their important role in the overall

SCM paradigm.

Another important aspect of the people dimension relates to the role of management in

supply chains. As noted by Lee (2004) in the Harvard Business Review, “there are no

technologies that can do those things; only managers can make them happen” (p. 11).

Mangan and Christopher (2005) suggest that contemporary SCM requires managers

with a “T-shaped” profile. This recognises the need for in-depth expertise in one

discipline combined with sufficient breadth of understanding to facilitate interactions

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with others. In line with this and with specific reference to future skill requirements for

supply managers, Giunipero et al. (2006) suggest that communication skills, as well as

technical and financial skills, will be important. A number of authors have proposed the

concept of supply chain learning (Bessant at al, 2003; Sweeney et al, 2005). This

involves leveraging the supply chain as a mechanism for inter-firm competency

development. Bessant et al. (2003) outline several possible benefits of this type of

approach but recognise that inter-firm learning is not necessarily a natural feature of

business networks.

The people dimension in SCM is important from many perspectives (including

relationships, management development and the potential role of supply chain learning).

However, Storey et al. (2006, p. 754) acknowledge the “crucial importance of the

behavioural and people dimension but the relative neglect of this in any substantive

form”. The work of Fawcett et al. (2008) draws a similar conclusion:

People are the key bridge to successful collaborative innovation and should

therefore not be overlooked as companies invest in supply chain enablers such as

technology, information, and measurement systems (p. 35).

This highlights the imbalance between the “soft wiring” (i.e. people) and the “hard-

wiring” (e.g. technology, information, and measurement systems) in the supply chain

improvement initiatives of firms. More recently, Tokar (2010) suggested that the issue

of human behaviour has been largely neglected in logistics and SCM scholarship and

presented a case for the importance of research in this area:

based on the belief that such research would offer theoretical richness to both

areas, significantly improve the predictive accuracy of available models, and

increase the efficiency of SCM and logistics in practice (p. 99).

In relation to supply chain learning specifically, Bessant at al (2003) acknowledge that

“it is still at an early stage and being made with faltering steps” (p. 182). Similarly,

Mangan and Christopher (2005) recognise that “there is still some way to go” in

building the required SCM skills and competencies (p. 189).

2.11.6 Fundamental Four: Summary and Some Concluding Points

Based on the foregoing, the creation and management of partnerships with all customers

and suppliers (internally and externally) is not what Fundamental Four is about. As

stated earlier, it is about recognising that putting SCM philosophy into practice requires

a reappraisal of such relationships. There is no “one size fits all” approach to this. There

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are many possible relationship forms and choosing the right ones in specific situations is

the key. Nonetheless, one of the biggest manifestations of the application of SCM in

recent years has involved the move away from adversarial relationships with key

external suppliers towards relationships which are based on mutual trust and benefits,

openness and shared goals and objectives. As noted by Harland et al. (1999, p. 659),

“there has been an observed shift away from multi-sourced adversarial trading with

suppliers, towards single or dual sourcing, resulting in a reduction (or ‘rationalisation’)

of supplier bases used by firms”.

2.12 Unified Definition of SCM: Some Concluding Points

It is worth returning to the work of Stock and Boyer (2009) alluded to in section 2.7.

Using the qualitative analysis software NVivo, their study examined 173 definitions of

SCM that have appeared in the literature “to determine important components of an

integrated definition of SCM” (p. 690). Three major themes, and a number of associated

sub-themes, that occurred repeatedly across these definitions were identified as shown

in Figure 2.26.

Figure 2.26: Themes and Sub-themes in SCM Definitions Source: Stock and Boyer (2009, p. 698)

Based on these sub-themes, they state that:

Overall, when examining the SCM definitions published through 2008, it was

unusual to find definitions that included all six sub-themes. Of the 173 unique

definitions identified, only a relatively few (eight in total) possessed all sub-

themes (p. 699).

Table 2.5 (below) shows how each of the sub-themes is addressed in the Four

Fundamentals construct.

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Table 2.5: Stock and Boyer (2009) and the Four Fundamentals

The three sub-themes that relate to “benefits” are explicitly dealt with in Fundamental

One. Customer and shareholder value creation is achieved through the simultaneous

creation of efficiency (i.e. the optimisation of total supply chain costs) and achievement

of customer satisfaction (i.e. meeting or exceeding the required or demanded customer

service levels in targeted markets/segments). Fundamental Two recognises the key

constituents or components both in the internal supply chain (i.e. “buy-make-move-

store-sell” – see Figures 2.14 and 2.15) and in the external supply chain (i.e. source

through to consumer – see Figure 2.16). Both the internal and external supply chain

configurations alluded to in Fundamental Two represent networks comprising these

constituent or component elements. Fundamental Four is concerned with the

relationships between these elements. Finally, Fundamental Three recognises the role of

the management of material/physical, finances, services and information flows in the

SCM paradigm. Thus, all six of the sub-themes of Stock and Boyer (2009) are captured

in the Four Fundamentals construct. This supports the author’s contention that the

construct concisely, yet comprehensively, defines the essence of SCM, as it has evolved

from a variety of disciplines over time and, therefore, represents a robust definition of

SCM.

In this regard, questions need to be raised about the extent to which an understanding of

SCM, as contained in such a definition, is a prerequisite for effective implementation.

As noted by Fawcett and Magnan (2002, p 359-360):

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SCM definitions vary widely from company to company and even from manager

to manager within the same company. As a result, not only do SCM practices lack

cohesion and visibility but supply chain strategies lack specificity and reach.

Managers must be precise in their discussions of specific practices – this is true

both within the firm and among channel members.

These are themes into which the research described in this thesis attempts to provide

fresh insights.

2.13 SCM: The Role of Logistics and Other Antecedents/Perspectives

2.13.1 Logistics and the Four Fundamentals of SCM

From the foregoing, it is clear that one of the principal antecedents of SCM is the field

of logistics. In terms of the four conceptual perspectives of Larson and Halldorsson

(2004), the Four Fundamentals could be regarded as “unionist intersectionist”. It is

unionist in that it does view logistics as one element of the wider SCM field. Logistics,

with its primary focus on the effective and efficient movement and storage of materials,

plays a critical role as part of Fundamental Three. Nonetheless, the strategic and

integrative role assigned to SCM by the intersectionist perspective is in line with the

Four Fundamentals, in particular Fundamental Two. The concept of using SCM as a

source of strategic leverage, as discussed earlier, is in line with this view. This relates

directly back to the need for clear SCM objectives – as articulated in Fundamental One

– which link directly with the overall corporate mission and objectives of an

organisation.

2.13.2 Other Antecedents and Perspectives

This section began by noting that one of the principal antecedents of SCM is the field of

logistics. However, it is not the only antecedent. Indeed, one of the difficulties in

carrying out a comprehensive SCM literature review is that there has been a

proliferation of relevant literature in recent years with research carried out from a range

of perspectives. In addition to the transportation and logistics literature stream, a large

amount of relevant material has been developed from a purchasing and supply

perspective. As noted in section 2.1, Tan (2001) illustrates the evolution of SCM from

both a purchasing and supply perspective, as well as a transportation and logistics

perspective. He suggests that although SCM has developed along these two quite

separate paths, “it has eventually merged into a unified body of literature with a

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common goal of waste elimination and increased efficiency” (p. 46). Other scholars (for

example: Min and Mentzer, 2000; Svensson, 2002) suggest that SCM can be clearly

traced back to origins in the field of marketing. Min and Mentzer (2000) identify “cause

and effect relationships among several important concepts in business research and

practice: the marketing concept, a marketing orientation, relationship marketing, and

SCM” (p. 782). Figure 2.27 is a graphical representation of these relationships

ultimately leading to “differential advantage”.

Figure 2.27: The Role of Marketing in SCM Source: Min and Mentzer (2000, p. 780)

One recently developed model (Mentzer et al., 2008) provides a useful representation of

SCM’s relationship with a number of other fields (namely logistics, marketing,

production and operations management), as well as proposing a focus for future

research in these domains (see Figure 2.28 below). In this schema, logistics, marketing

and production are regarded as functional areas and research in these domains (“Level 1

Research”) is deemed to be based on examination of functional level phenomena.

Operations management takes place within the firm and the research agenda (“Level 2

Research”) is about examination of the relationships among intra-firm functional

phenomena. Finally, SCM looks beyond the boundary of the firm and the research

agenda (“Level 3 Research”) is concerned with examination of inter-firm supply chain

phenomena. The authors are clear that their schema does not imply that operations

management is in any way “elevated” in status or importance above logistics, marketing

or production. Similarly, neither is SCM in any way “elevated” in status or importance

above operations management. Rather, the framework aims to enhance understanding of

the domains and limits of different areas of business.

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Figure 2.28: A Hierarchy of Research Focus Source: Mentzer et al. (2008, p. 42)

2.13.3 Summary and Some Concluding Points

The primary focus of this section has been on examining the relationship between SCM

and one of its main antecedents, i.e. logistics, particularly in the context of the Four

Fundamentals of SCM. However, given the diverse origins of SCM and the centrality of

integration within the SCM paradigm (see Fundamental Two) the relationship between

SCM and a number of other domains has also been noted.

2.14 Reflection on the Four Fundamentals: From a Unified Definition Towards a

Unified Theory of SCM?

2.14.1 Background

As noted earlier, the author believes that the Four Fundamentals concisely, yet

comprehensively, defines the essence of SCM, as it has evolved from a variety of

disciplines over time. However, as the Four Fundamentals goes beyond the often quite

trite one-line definitions, it also begins to capture some of the main elements of

effective SCM practice. Indeed, and as shown in the preceding sections, the approach

has been developed in the light of the quite well documented elements of SCM “best

practice” found in the literature. It could be argued, therefore, that the comprehensive

nature of the Four Fundamentals means that it represents something more than a

“unified definition” of SCM; rather, it integrates many of the key elements of earlier

SCM “theory” into a set of constructs which, whilst not in itself purporting to be a

“unified theory”, does capture the essence of effective SCM practice. In this way, it

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could be argued that the Four Fundamentals represents a bridge between definitional

theory and practical implementation. In this context, this section reflects on the Four

Fundamentals in the light of three well known and widely cited sets of constructs or

“idealised schemas” of SCM practice. By definition, these three approaches are not

exhaustive of what appears in the literature but they are indicative of the approaches set

out by various scholars in recent years.

2.14.2 Lummus and Vokurka Practical Guidelines

The paper of Lummus and Vokurka (1999) was cited earlier in relation to the historical

evolution of SCM. Based on the authors’ analysis of the history of SCM, the concluding

part of their paper sets out some guidelines for companies “to begin managing across

the entire supply chain” (p. 16). The seven guidelines are summarised in Table 2.6

(below).

Table 2.6: Guidelines on Good SCM Practice Source: Modified from Lummus and Vokukra (1999)

There is a strong degree of compatibility between these guidelines and the Four

Fundamentals. Guidelines one and two have a strong focus on business objectives and

supply chain goals; Fundamental One suggests that SCM implementation is predicated

on the ability of firms to set out clear supply chain objectives. Guideline three lays

emphasis on the need for systems which “listen to signals of market demand and plan

accordingly”; Fundamental One states that understanding customer service

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requirements sets the specification for SCM. Guideline four is concerned with the

establishment of partnerships with suppliers; Fundamental Four goes beyond this by

asserting that SCM is largely concerned with relationships, often based on partnership

concepts, with internal and external customers as well as suppliers. Guideline five

relates to the “development of customised logistics networks”; Fundamental Three

refers to the holistic management of material flows across the supply chain. Guideline

six is concerned with supply chain information systems, with a strong emphasis on

product flow visibility; Fundamental Three recognises the centrality of information

flow management in effective SCM. Finally, guideline seven relates to the role of

performance measurement across the supply chain; Fundamental Two noted that

traditionally supply chains were often measured, and therefore managed, in isolation

and that more integrated KPIs are required if fragmentation is to be replaced by

integration.

2.14.3 Burgess et al. Constructs of SCM

Burgess et al. (2006) proposed a set of seven constructs of SCM. In this context, the

definition of a “construct” is based on the work of Nunnally (1978) as a higher order

abstract variable that is not necessarily directly measurable, but which provides a more

rounded definition of the underlying concepts. Burgess et al. (2006, p. 709) go on to

state that:

For the SCM field, agreement on a common set of constructs does not appear to

exist. Some researchers use a single overarching construct to cover all aspects of

SCM (Ho et al., 2002), whilst others use a myriad collection of narrowly defined

constructs (for example, Chen and Paulraj (2004) define 18 constructs and Min

and Menzter (2004) describe 24 constructs). In the absence of consensus on a

common set of SCM constructs, we decided to consolidate, to a reasonable list, the

constructs proposed by researchers such as Chen and Paulraj (2004), Min and

Mentzer (2004) and Tracey et al. (2004) by focusing on the commonalities

amongst these lists. The final outcome was a set of seven constructs.

The seven constructs are shown in Table 2.7 (below).

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Table 2.7: Seven Constructs of SCM Source: Modified from Burgess et al. (2006)

The first construct is concerned with the strategic nature of SCM; the Four

Fundamentals, taken as a whole, recognises that SCM is first and foremost a strategic

concern, with Fundamental Four specifically recognising the role of management and

leadership across the supply chain. Constructs two and three emphasise the importance

of both intra-organisational and inter-organisational relationships; Fundamental Four

asserts the role of relationship management in the context of strengthening internal and

external (i.e. intra-firm and inter-firm) integration. The role of logistics in the wider

supply chain is captured in construct four; as noted in relation to the Lummus and

Vokurka guidelines, Fundamental Three refers to the holistic management of material

flows across the supply chain – i.e. the need for integrated logistics. Construct five notes

the need for “processual arrangements that facilitate interactions within and between

organizations, with a view to continually improving them”; Fundamental Three asserts

the importance of the holistic management of material, information and money flows

both internally and externally as the basis of supply chain operations and control.

Construct six (which is very similar to the sixth guideline of Lummus and Vokurka) is

concerned with supply chain information systems, with a strong emphasis on

communication; as noted above, Fundamental Three recognises the centrality of

information flow management in effective SCM. Finally, construct seven (analogous to

guideline seven of Lummus and Vokurka) relates to supply chain performance

measurement; Fundamental Two (as noted above) stated that more integrated KPIs are

required if fragmentation is to be replaced by integration.

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2.14.4 Storey et al. Idealised Schemas

The paper of Storey et al. (2006) is based on a three-year study of six supply chains

encompassing 72 companies. As part of their analysis they recognise that much of the

theory in this field is based on “idealised schemas of optimal routes and quantities for

demand fulfilment when considered from a whole-network or chain perspective” (p.

760). These idealised schemas vary in detail when advanced by various proponents but

there are a number of relatively common elements which Storey et al. (2006) summarise

(see Table 2.8, below) as the “the characteristics underpinning the ideally managed

supply chain” (p. 760).

Table 2.8: Idealised SCM Characteristics Source: Storey et al. (2006, p. 760)

As with the guidelines of Lummus and Vokurka (1999) and the constructs of Burgess et

al. (2006) these ideal characteristics of SCM again largely mirror – to greater or lesser

extents – the Four Fundamentals of SCM. For example: characteristic one (“seamless

flow from initial source(s) to final customer”) is in line with the integration principle of

Fundamental Two; characteristic two (“demand-led supply chain”) is analogous to the

principle espoused in Fundamental One that understanding customer requirements sets

the specification for (or leads) the supply chain; characteristic three (“end to end

pipeline visibility”) is an integral element of Fundamental Three (i.e. the need for

holistic management of the information flows across the supply chain or pipeline);

characteristic four (“collaboration and partnership”) is almost identical to the treatment

of relationships and partnerships in Fundamental Four. The remaining seven idealised

characteristics, albeit less directly and explicitly, can all find expression in one or other

of the Four Fundamentals.

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2.14.5 Summary and Some Concluding Points

As noted in the introduction to this section, the Four Fundamentals of SCM is primarily

a comprehensive definition. However, the author contends that it goes beyond a purely

definitional focus. It does not purport to position itself as a “unified theory of SCM” –

as noted earlier, it is debatable whether it is either possible or desirable to develop such

a theory. However, its comparison with some of the practical guidelines, constructs and

idealised schemas of SCM indicates that it provides a sufficiently robust basis for much

of the research to be described in this thesis.

2.15 Research Questions

2.15.1 Introduction and Theoretical Context

There is significant evidence that the effective implementation of SCM can result in

improvements in the performance of firms. For example, on the basis of a study of 196

firms Li et al. (2006) concluded that higher levels of SCM practice “can lead to

enhanced competitive advantage and improved organizational performance” (p. 107).

More recently, a study by Johnson and Templar (2011) of 117 publicly traded UK

manufacturing firms indicated that “improving SCM practices has a positive impact

upon improved firm performance” (p. 88). Recent studies in a US setting by Elmuti et

al. (2008) and Ellinger et al. (2011) reveal similar relationships between SCM adoption

and firm success. Based on their study of firms in the Taiwanese IT sector, Ou et al.

(2010) stated that:

The results presented in this paper show that external customer-firm-supplier

relation management positively impacts firm internal contextual factors, which in

turn have positive effects on firm performance. This finding suggests that a

successful implementation of SCM not only directly improves operational

performance, but also indirectly enhances customer satisfaction and financial

performance (p. 526).

More recently, the work of Lado et al. (2011) supported this view and documented how

supply chain relational capabilities engender competitive advantage. These findings are

significant given – as noted in Fundamental Four (see section 2.11) – the increasingly

important role of relationship management in SCM. Similarly, the work of Frohlich and

Westbrook (2001) based on a survey of 322 global manufacturers strongly supported

the hypothesis that “the companies with the greatest arcs of supplier and customer

integration will have the largest rates of performance improvement” (p. 193). This is

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also significant given – as noted in Fundamental Two (see section 2.9) – the centrality

of integration in SCM philosophy. However, Fabbe-Costes and Jahre (2008), based on a

systematic review of 38 papers on the subject of supply chain integration (SCI) note

that:

Even though half of the papers of our total sample conclude that SCI has a

positive effect on performance, the variety of empirical bases and the research

design of the studies suggest that caution is advisable (p. 140).

In a similar vein, Storey et al. (2006) assert that, “while there is an emerging body of

theory which ostensibly offers a relatively coherent and compelling prescriptive

narrative, predominant practice is at considerable odds with this conceptualisation” (p.

755).

2.15.2 Divergence of Theory and Practice

As noted earlier, many scholars have discussed the lack of a robust theoretical

foundation in the SCM field. Several attempts have been made to address this perceived

challenge with varying degrees of success. At present there is certainly no universally

agreed upon unified theory of SCM. As noted in section 2.6.4, in their paper

Halldorsson et al. (2007) conclude that “the main message in this paper is that there is

no such thing as a ‘unified theory of SCM’” (p. 292). As noted by Voss et al. (2002) the

development of the SCM field has been largely practitioner-led, with theory (such as it

is) largely following practice. This view is reinforced by Lambert and Cooper (2000)

who state that, “Thus far, there has been relatively little guidance from academia, which

in general has been following, rather than leading, business practice.” (p. 65).

Furthermore, the practical experience upon which this “theory” is based is often

confined to a relatively small number of key industry sectors. For example, Burgess et

al. (2006) state that:

Anecdotally, the SCM literature appears to be concentrated in a handful of

industry sectors. Examples to illustrate SCM concepts are mostly chosen from

industries such as consumer goods retailing, computer assembling and automobile

manufacturing (p. 707).

The comprehensive literature review of Chen and Paulraj (2004b) noted that

“practitioners are far from mastering SCM” (p. 150). Some authors, while asserting that

SCM is a sound concept have noted that turning the idea into practice is not easy and

that it has so far received more lip service than accomplishment, except in a few leading

edge companies (Leenders et al., 2002).

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Carter and Narasimhan (1994) noted that the incorporation of SCM into the overall

business planning process is not widely practiced. As noted earlier, the concept of

integration lies at the heart of SCM philosophy. However, there is significant evidence

of a divergence between theory and practice in this core area. For example, Storey et al.

(2006) recognise that supply chain theory suggests that the chain should be managed

from end-to-end (as suggested in Fundamental Two) but note that, “our research found

very few examples of this” (p. 763). The work of Fabbe-Costes and Jahre (2007)

concluded that, “at this point in time it seems that we can confirm that integration is

more rhetoric than reality, that it might be more difficult in practice than in theory” (p.

848). Their more recent work (Fabbe-Costes and Jahre, 2008) reinforces this view.

In short, there is evidence to suggest that there are – as Storey et al. (2006) put it –

“substantial gaps between theory and practice” (p. 769). Stank et al. (2011), in their

recent synopsis of The New Supply Chain Agenda (Slone et al, 2010), make a similar

point when they state that: “Unfortunately, few companies have yet to take advantage of

the stakeholder value opportunity presented through supply chain activities” (p. 941).

These arguments raise important questions concerning the real impact of SCM theory in

practice.

2.15.3 The Forrester Forecast – Rhetoric or Reality?

As was noted earlier, SCM is not new. The term may be relatively new but supply

chains have existed for a very long time – in fact they have probably always existed!

For example, Forrester’s often cited article from the Harvard Business Review in 1958

(Forrester, 1958) states that:

Management is on the verge of a major breakthrough in understanding how

industrial company success depends on the interactions between the flows of

information, materials, money, manpower, and capital equipment. The way these

five flow systems interlock to amplify one another and to cause change and

fluctuation will form the basis for anticipating the effects of decisions, policies,

organisational forms, and investment choices (p. 37).

His article introduced the demand amplification concept using a computer simulation

model21. If, as Forrester suggested, management was on “the verge of a major

21 More recent replications of this phenomenon include the ‘Beer Game’ simulation and research covering the ‘Bullwhip Effect’ (Lee et al. 1997).

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breakthrough” over half a century ago, it seems pertinent to raise questions concerning

how this breakthrough – mainly in relation to managing relationships between supply

chain companies – has impacted on companies in reality. In fact over 40 years after

Forrester’s article first appeared, Mentzer et al. (2001, p. 20), in concluding their paper,

asked the specific question: “How prevalent is SCM?” This is a key question to which

ongoing research needs provide some answers.

A number of authors have raised serious questions about the real impact of SCM in

practice. Cousins et al. (2006) suggest that:

SCM still appears to suffer from an underlying frustration or perception of being

largely ignored; practitioners feel they have a great deal of value to add, but the

organisation is not concerned with them (p. 699).

Storey at al. (2006) raise doubts about the “more full-blown claims of many of the

advocates (of SCM)” and suggest that “the pretence that SCM is a discipline which is

effectively grappling with these forces is an exaggeration” (p. 771). As noted earlier,

they also state that the SCM literature tends move rather imperceptibly between

description, prescription and trend identification. This results in what New (1997)

referred to as “normative tension” between the is and the ought:

the rhetoric of managerial folklore tells managers to feel that they should take a

broad, integrative approach and ‘manage the whole chain’, and this often clouds

practitioner reports, with both overstatement and yet profound cynicism (p. 16).

He goes on to suggest that “academics too are often guilty of perpetuating a type of

breathless hyperbole” and to note that “researchers must grapple with the fact that

(SCM) exists in the netherworld of the imperative and the actual” (p. 16). Stank et al.

(2011), in setting out their proposed directions for future research state that “now, more

than ever, meaningful research is required to help supply chain practitioners separate

truth from hype” and that “to truly impact practice, academics must be able to provide

deeper insights into…various complex and multi-dimensional SCM concepts” (p. 941).

The fundamental purpose of this research is to disentangle the rhetoric from the reality.

The related fundamental question is: “What is the real impact of SCM theory in

practice?” As illustrated by the small sample of papers in Table 2.9, much of the earlier

empirical research in this field has focussed on specific elements of the overall SCM

concept.

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Table 2.9: Focus of SCM Empirical Research

There is a considerable body of SCM research with a focus on specific sectors. The

specific drivers at play in different sectors raises questions about the extent to which the

findings from such research may be generalised. There is also a considerable body of

research that focuses on specific supply chain elements or “links”. Many scholars have

examined aspects of purchasing and supply (i.e. the “buy” link). Similarly, there has

been extensive treatment of specific transport, logistics and distribution issues (i.e. the

“move” and “store” links). Production-specific supply chain domains (i.e. the “make”

link) have also been widely researched. A relatively large number of papers have

appeared which have a focus on SCM technology and performance issues. This reflects

the proliferation of interest in these two specific areas in recent years. The former

includes papers which are concerned mainly with ICT application in the supply chain;

the latter includes papers which have performance measurement issues as the central

theme. The growing interest in various aspects of the people dimension of SCM has

resulted in a focus on these issues. The “by country” category comprises research which

is aimed chiefly at discovering the state of practice in particular geographical regions.

A key aspect of this research involves moving beyond these specific foci and examining

SCM in a holistic manner.

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2.15.4 Development of Research Questions

Based on the comprehensive literature review set out in the preceding sections of this

chapter, this section sets out the main questions which the research described in this

thesis attempts to answer. As noted above, the fundamental aim of this research is to

disentangle the rhetoric from the reality in relation to SCM adoption in practice. It will

do so in the specific context of Ireland. Based on this, and as noted earlier, the related

fundamental question is: “What is the real impact of SCM theory in practice?” The

following four research questions have been formulated based on this overall question.

RQ1 - What is the current level of understanding of SCM in practice?

RQ2 - What is the current level of adoption of SCM?

RQ3 - What are the critical success factors and/or inhibitors to success in putting SCM

theory into practice?

RQ4 - What practical measures could be implemented at policy/supply chain/firm level

to improve the level of effective SCM adoption?

Figure 2.29 (below) shows how some of the key literature reviewed by the author

specifically informed the development of these questions.

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Figure 2.29: Development of Research Questions

2.16 Summary and Some Concluding Comments

The comprehensive literature review described in this Chapter is based on the thematic

areas set out in Figure 2.2. The core areas are:

i. evolving context (section 2.2);

ii. historical evolution (section 2.3);

iii. earlier definitions (section 2.4);

iv. paradigm shifts (section 2.5); and,

v. SCM theory (section 2.6)

The author’s Four Fundamentals of SCM, based on his analysis of these SCM domains

and described in sections 2.7 to 2.12, relate to:

1. Setting SCM objectives;

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2. SCM philosophy;

3. Managing the flows; and,

4. Supply chain relationships.

The role of within SCM of one of its principal antecedents, namely logistics, as well as

the relationship between SCM and other established subject domains is set out in

section 2.13. Comparison between the Four Fundamentals and some of the practical

guidelines, constructs and idealised schemas of SCM (as described in section 2.14)

indicates that it provides a sufficiently robust basis for much of the research to be

described in this thesis. Section 2.15 went on to set out the overall objectives of the

research, as well as the research questions that will be addressed.

Based on these research questions, and using the Four Fundamentals as a framework,

Chapter 3 goes on to set out a detailed description and justification of the research

methodology to be adopted.

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CHAPTER 3

RESEARCH METHODOLOGY

3.1 Introduction

The research questions to be answered in this thesis were set out in Chapter 2 based on

the preceding literature review. The structure of Chapter 3 is as shown schematically in

Figure 3.1 (below).


Following this introduction, the chapter proceeds (section 3.2) with a discussion of the

philosophical underpinnings of research. This section has a strong focus on two

opposing schools of thought – positivism and interpretivism – as a means of illustrating

some of the main epistemological and ontological considerations important in research.

The chapter goes on (section 3.3) to discuss research methodology. This section starts

by providing an overview of two approaches to carrying out research. One (deduction)

is based on testing theories and is closely associated with the positivist tradition. The

other (induction) is based on theory building and is associated with the interpretivist

tradition. This leads directly to a discussion on the use of predominantly quantitative

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and qualitative approaches, as well as on the use of combinatory methodologies. It goes

on to introduce the case study, action research and grounded theory methodologies.

Section 3.4 then introduces a range of specific research methods and techniques with a

strong focus on the use of mixed methods and methodological pluralism. In this way,

sections 3.2, 3.3 and 3.4 provide a menu of possible philosophical and methodological

options, as well as of possible methods and techniques. Section 3.5 goes on to describe

and justify the overall integrated research design to be used in answering the research

questions set out in Chapter 2. The subsequent sections provide a detailed description of

the work carried out by the author during the three main phases of the overall research

design, i.e. focussed interviews (section 3.6), focus groups (section 3.7) and the

questionnaire survey (section 3.8). The chapter concludes by making some general

points by way of summary (section 3.9).

3.2 Research Philosophy

The philosophy underpinning research of any kind is closely bound up with notions of

ontology, epistemology and axiology. In particular, it relates closely to the concept of a

paradigm with the paradigmatic preferences of the researcher determining to a great

extent the detail of the methodology adopted. This section begins with a discussion of

ontology and epistemology, as well as the nature of paradigms, and goes on to relate

paradigmatic preferences to ontological, epistemological and other assumptions made

by the researcher. It concludes by relating these preferences to the body of logistics and

supply chain management (SCM) knowledge that has been developed over the years –

much of which was the focus of the literature review in Chapter 2 – and by setting out

the paradigmatic preferences and philosophical positionality of the author in answering

the research questions set out in Chapter 2.

3.2.1 Ontology and Epistemology

The Oxford English Dictionary defines ontology as “the branch of metaphysics

concerned with the nature of being”. Form a research perspective, Saunders et al. (2009,

p. 110) state that “ontology is concerned with the nature of reality”. Easterby-Smith et

al. (2008, p. 60) go a step further by suggesting it is concerned with “philosophical

assumptions about the nature of reality”. In a similar vein, Bryman and Bell (2003, p.

19) note that “questions of ontology are concerned with the nature of social entities”.

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The Oxford English Dictionary defines epistemology as “the branch of philosophy that

deals with knowledge, especially with regard to its methods, validity, and scope”. From

a research perspective Collis and Hussey (2009, p. 59) suggest that it is concerned with

the fundamental question: “what do we accept as valid knowledge?” Easterby-Smith et

al. (2008, p. 60) define epistemology as “general sets of assumptions about the best

ways of inquiring into the nature of the world”.

As noted earlier, the ontological and epistemological assumptions and stances of

researchers have a major impact on the way in which research is carried out. In relation

to SCM research this is articulated effectively by New (2009, p. 89):

Although both academic literature and practitioner discourse are happy to bandy

the term ‘supply chain’ around, the implicit imagery behind the metaphor –

materials flowing through the economy via some neat system of imaginary pipes –

is intrinsically problematic. The difficulties arise because of questions of ontology

(for example, what do we mean by ‘product’?) and epistemology (how can we

know?).

The following sections discuss paradigms, in particular the positivist and interpretivist

positions, with specific reference to their ontological and epistemological assumptions.

3.2.2 Paradigms

The emphasis on the concept of a paradigm in research philosophy in recent decades is

usually attributed to the work of Thomas Kuhn in the 1960s. Kuhn (1962) discussed

paradigms in the context of “the progress of scientific discoveries in practice” and went

on to define paradigms as “universally recognised scientific achievements that for a

time provide model problems and solutions to a community of practitioners” (p. viii).

Bryman (1988) provides a useful definition of a paradigm: “a cluster of beliefs and

dictates which for scientists in a particular discipline influence what should be studied,

how research should be done and how results should be interpreted” (p. 4). Gummesson

(2000, p. 18) suggests that the concept can be used to represent “people’s value

judgements, norms, standards, frames of reference, perspectives, ideologies, myths,

theories, and approved procedures that govern their thinking and action”.

Perhaps of more interest and consequence in the context of the current research is the

impact of the “world-view” represented by the paradigmatic preference of a researcher

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on the conduct of research in the social sciences generally and in business research

specifically. The work of Burrell and Morgan (1979) is central to this discussion. In

their text Sociological Paradigms and Organisational Analysis they applied the notion

of a paradigm to the social sciences and described four distinct paradigms (see Figure

3.2).

Figure 3.2: Four Paradigms for the Analysis of Social Theory Source: Burrell and Morgan (1979, p. 23)

In this classification, the vertical axis is concerned with assumptions about the nature of

society. The horizontal axis is concerned with assumptions about the nature of social

science. The latter is of particular interest from the perspective of research in business

and management with researchers tending to position themselves along the subjective-

objective continuum. Whilst it is important to recognize that this is a continuum,

discussion and debate between adherents to the “extreme” ends of the spectrum has

tended to concern itself with the relative merits of objectivist (positivist) and

subjectivist (interpretivist) positions. For example, Tashakkori and Teddlie (1998)

suggest that it is more appropriate for the researcher in a particular study to think of the

philosophy adopted as a continuum rather than opposite positions. Morgan and

Smircich (1980, p. 492) go further by proposing a six-stage continuum between “pure”

positivism and “pure” interpretivism. Nonetheless, it is useful to consider the

characteristics of the purist positions in order to illustrate the very different world-views

represented by each. These world-views are intrinsically bound up with notions of

ontology and epistemology. As noted by Guba and Lincoln (1994, p. 105):

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Questions of method are secondary to questions of paradigm, which we define as

the basic belief system or world view that guides the investigation, not only in

choices of method but in ontologically and epistemologically fundamental ways.

3.2.3 The Positivist Paradigm

Positivism, which has its roots in the philosophy known as realism, was developed by

theorists such as Auguste Comte (1798-1857), John Stuart Mill (1806-1873) and Emile

Durkheim (1859-1917). It lies at the objective end of the paradigmatic continuum

shown in Figure 3.2 (above). The term derives from “positive” as in progressive, its

proponents believing that it offered a coherent approach to the positive and progressive

development of the social sciences. Outhwaite (1987), quoted in Robson (2002, p. 19-

20), noted three distinct generations in the development of positivism22.

In ontological terms, positivists believe that there is one social reality and that this

reality is external to the researcher. In terms of epistemological assumptions, they try to

maintain an independent and objective stance because they believe that only phenomena

that are observable and measurable can be validly regarded as knowledge (Collis and

Hussey, 2009). Mangan et al. (2004, p. 568) usefully capture the approach as “top-

down, outside-in”. Positivists, therefore, tend to place a strong emphasis on the use of

quantitative methods to deductively test hypotheses in an objective manner. The

positivist paradigm has its roots in the natural sciences and was the predominant

position adopted by researchers in the early days of the social sciences (around the end

of the nineteenth century). However, there are many potential pitfalls associated with

the adoption of this position in research related to human issues. These pitfalls resulted

in some of the ontological and epistemological assumptions associated with the

paradigm being challenged and a new paradigm emerging. As noted by Gummesson

(2000) this new paradigm is variously referred to as – amongst others – interpretivism,

phenomenology and subjectivism.

3.2.4 The Interpretivist Paradigm

As noted above, the interpretivist paradigm developed in the social sciences as a result

of assumptions associated with the traditional positivist paradigmatic position being

challenged. It lies at the subjective end of the paradigmatic continuum shown in Figure

3.2 (above). The term derives from the fact that the world is interpreted through the

22 Nineteenth century positivism; logical positivism; post-second world war positivism.

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mind and that this interpretation leads to the phenomena under investigation being

better understood. As noted earlier, there are many terms – often used interchangeably

by scholars – that are widely used to describe the same basic paradigmatic position. For

example, Jill Collis and Roger Hussey used the term “phenomenology” in the earlier

editions of their text on business research methods. However, in the most recent edition

(Collis and Hussey, 2009) they use the word “interpretivism” to “suggest a broader

philosophical perspective” (p. 57). For similar reasons, the word “interpretivism” is

used in this context throughout this thesis.

In ontological terms, interpretivists believe that social reality is subjective because it is

socially constructed. For this reason, the phrase “social constructionism” is often used

to describe this paradigmatic position – the world is seen as an emergent social process.

As a result, there are multiple realities as each person has his or her own sense of reality

(Collis and Hussey, p. 59). In terms of epistemological assumptions, interpretivists

attempt to minimise the distance between the researcher and what is being researched

based on a recognition that the observer is part of what is being observed. Mangan et al.

(2004, p. 568) usefully capture the approach as “bottom-up, inside-out”. Interpretivists,

therefore, tend to place a strong emphasis on the use of qualitative methods to

inductively build theory in a subjective manner. The emphasis is on the development of

a general understanding of phenomena, rather than causal relationships between

variables.

3.2.5 Positionality – The “Paradigm Wars”

“Pure” positivism and “pure” interpretivism can be regarded as extreme positions at

either end of the paradigmatic continuum. Over the years there has been extensive

debate about the relative merits of each position and the extent to which positionality23

in paradigmatic terms impacts upon the research process. Robson (2002) refers to this

debate as “so-called ‘paradigm wars’ endemic” (p. 43). Mangan et al. (2004) note that

“the various paradigmatic positions are now often discussed in terms of an antithesis

between two schools of philosophy” (p. 566). Similar points are made by several

authors, notably Gummesson (2000) and Hussey and Hussey (1997). The forthright

views of Byrne (1998) in relation to the positivist position in social sciences research is

revealing: “Positivism is dead. By now it has gone off and is beginning to smell.” (p.

23 “Positionality” in this context is - as defined by, for example, Herr and Anderson (2005) - the philosophical (or paradigmatic) position or preference of the researcher.

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37). Nonetheless, it is worth considering the distinctive characteristics of each position,

with particular reference to ontological, epistemological and other relevant issues. These

characteristics are shown in Table 3.1, which is based on a variety of sources consulted

by the author24.

Table 3.1: Characteristics of Positivism and Interpretivism

In terms on ontological assumptions, the positivist position is objectivist in that reality

is viewed as separate from the researcher. This lies at the right-hand end of the matrix of

Burrell and Morgan (1979) as shown in Figure 3.2. In contrast, the interpretivist

position is subjectivist in that reality is as seen (subjectively) by the researcher. This lies

at the left-hand end of the matrix of Burrell and Morgan (1979) as shown in Figure 3.2.

Epistemologically, the positivist position is characterized by independence. In other

words, the researcher is independent of what is being researched. Conversely, the

interpretivist position recognizes the interdependence and interaction of the researcher

and the researched. In other words, the observer (researcher) is part of what is being

observed (researched).

Axiology is the branch of philosophy that studies judgments about the role of values

(Saunders et al, 2009). Axiologically, the positivist paradigm is value-free, whereas the

24 In particular, Easterby-Smith et al. (2008), Saunders et al. (2009), Bryman and Bell (2003), Robson (2002), Denzin and Lincoln (2000), Collis and Hussey (2009).

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interpretivist position recognizes that the values of the researcher impact upon the

research. As a consequence of this, positivist rhetoric tends to be formal using the

passive voice and quantitative “words”. The interpretivist rhetoric, on the other hand,

tends to adopt a more informal language using the personal voice and qualitative terms.

As noted earlier, positivists look for causal relationships between variables while

interpretivists are more interested in developing a general (albeit deep and rich)

understanding of a phenomenon.

The development and testing of hypotheses and theory deductively is a characteristic of

the positivist paradigm; interpretivists try to build theory inductively. The emphasis on

quantitative hypothetico-deductive reasoning results in positivists having to reduce a

situation to its simplest possible elements. This process enables variables to be

operationalised (and measured). Interpretivists, on the other hand, adopt a more holistic

approach, ensuring that the views of all stakeholders are considered. A key objective of

positivism is to generalize findings from samples to the wider population under study.

This is often achieved using relatively large samples (for example in survey-based

research). In interpretivism the emphasis is on theoretical abstraction – this allows the

researcher to work with relatively small samples (for example in case-based research).

Given its origins in the natural sciences, positivism has a strong emphasis on

experimentation in “artificial” locations (such as laboratories). As the term implies,

interpretivists focus on interpreting what is observed in natural (i.e. “real-world”)

locations or settings. Collis and Hussey (2009) define reliability as “the absence of

differences in the results if the research is repeated” (p. 64) and validity as “the extent to

which the research findings accurately reflect the phenomena under study” (p. 65).

Thus, positivists tend to emphasise high reliability with interpretivists favouring high

levels of validity. Finally, it is clear from the foregoing that positivist paradigm has

tended to be highly quantitative in nature while the interpretivist paradigm has tended to

be more qualitative.

However, whilst the foregoing is interesting in that it provides a stark contrast between

“pure” positivist and interpretivist paradigmatic assumptions and preferences, it should

be noted that most research lies somewhere along the aforementioned continuum or

spectrum. As noted by Collis and Hussey (2009, p. 57) “few researchers now adopt the

pure forms of the main paradigms”. It is also interesting to note that there are differing

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views about the relative commensurability of the paradigms (as noted by Bryman and

Bell 2003, p. 23). Easterby-Smith et al. (2008), for example, note the trend from

positivism to interpretivism in social sciences research since the early 1980s. Robson

(2002) puts the debate between the two positions into sharp focus:

This solution to the so-called ‘paradigm wars’ endemic in the social sciences for

the past three decades between positivists (empiricists, quantitative researchers)

and constructionists (phenomonologists, qualitative researchers) calls for a radical

reappraisal by warriors on both sides of the divide. (p. 43)

3.2.6 Towards a Multi-Paradigmatic Position?

Bryman and Bell (2003), in their discussion of the relative merits of the two “pure”

positions note that:

The point being made here is that quantitative and qualitative research represent

different research strategies and that each carries with it striking differences in

terms of the role of theory, epistemological issues and ontological concerns.

However, the distinction is not a hard-and-fast one: studies that have the broad

characteristics of one may have a characteristic of the other (p. 26).

Similarly, Guba and Lincoln (1994) state that “both qualitative and quantitative

methods may be used appropriately with any research paradigm” (p. 105) and Easterby-

Smith et al. (2008) that “research problems (in management) often require eclectic

designs which draw on more than one tradition” (p. 56). However, these assertions are

straying into the realm of research design and choice of methodology, rather than being

purely rooted in the debate about philosophy.

Nonetheless, and perhaps most strikingly, Bryman (1988) points out that in practice

there is a greater rapprochement between workers in the two traditions than would

appear to be the case from studying their philosophical underpinnings, and hence a

greater compatibility of approach in practice. This is probably particularly true in

applied areas. Logistics and SCM could be regarded as such an “applied area” and there

is evidence that this “rapprochement” is finding favour with scholars in the field. The

foregoing raises questions about the legitimacy of two other approaches – realism and

pragmatism.

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As noted in section 3.2.3, positivism has its roots in the branch of philosophy known as

realism25. Robson (2002) proposes an approach to “real-world” research based on this

paradigm and, in particular, the variant known as critical realism. He suggests that

“realism permits a new integration of what are usually referred to as subjectivist and

objectivist approaches” (p. 35). It is usually regarded as lying at the midpoint of the

lower horizontal axis in the Burrell and Morgan matrix shown in Figure 3.2 (above).

Robson’s argument is that real-world research needs to retain the advantages of

positivism by ensuring that a “scientific attitude” is adopted. In this context a “scientific

attitude” requires that research be carried out systematically, sceptically and ethically.

However, he goes on assert that “it is the ‘standard’ positivist, scientific view which is

wrong” and that:

rather than throw the scientific baby out with the positivist bath water, perhaps one

can nurture this frail infant by re-conceptualising the view of science so that it

provides a more adequate representation of what scientists do and a more

promising basis for social sciences (p. 21-22).

The essence of this approach, based largely on the work of Roy Bhaskar and Rom

Harre, is that the outcome of an action follows from mechanisms acting in particular

contexts.

Curran and Blackburn (2001) argue that the pluralist approach (i.e. pragmatism) is an

attempt to “cross the divide between the quantitative and qualitative and the positivist

and non-positivist” (p. 123). As noted by Saunders et al. (2009), pragmatism involves

adopting ontological, epistemological and axiological approaches as determined by the

research question. In other words, a particular approach may be more appropriate for

answering particular questions. As they succinctly put it:

If the research question does not suggest unambiguously that either a positivist or

interpretivist philosophy is adopted, this confirms the pragmatist’s view that it is

perfectly possible to work with variations in your epistemology, ontology and

axiology (p. 109).

Another way of describing the pragmatic position is that the truth is “what works”.

Robson (2002) argues that “pragmatism is itself a philosophical position with a

respectable, mainly American, history going back to the work of Charles Sanders

Peirce, William James and John Dewey” (p. 43).

25 Many labels exist, including scientific realism, critical realism, falliblistic realism, subtle realism and transcendental realism.

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In any case, it is important that researchers recognise the importance of philosophical

positionality and paradigmatic preferences for a variety of reasons. For example,

Easterby-Smith et al. (2008) suggest that:

Failure to think through philosophical issues such as this (the relationship between

data and theory), while not necessarily fatal, can seriously affect the quality of

management research, and they are central to the notion of research design (p. 56).

In a similar vein, Johnson and Clark (2006) argue that the important issue is not so

much whether our research should be philosophically informed, but it is how well we

are able to reflect upon our philosophical choices and defend them in relation to the

alternatives we could have adopted. Morgan and Smircich (1980), in a point reiterated

by Mangan et al. (2004), suggest that researchers often fail to effectively communicate

with each other as a result of the varying assumptions they hold about their subject.

3.2.7 Paradigmatic Preferences and Positionality in this Research

As noted by Mangan et al. (2004) “the majority of logistics research is, rightly or

wrongly, primarily populated by quantitative research viewed through a positivist lens”

(p. 575). This assertion is borne out by the reviews carried out by Dunn et al. (1994),

Mentzer and Kahn (1995) and Samuel (1997) in the 1990s, and more recently by

Sachan and Datta (2005), Frankel et al. (2005) and Spens and Kovacs (2006). For

example, Sachan and Datta (2005) report that of the papers published in the Journal of

Business Logistics, Supply Chain Management: an International Journal and the

International Journal of Physical Distribution and Logistics Management between 1999

and 2003, the majority (over 60%) make exclusive use of research methods associated

with the positivist paradigm (surveys, simulation and mathematical modeling).

However, there is some evidence that the extent to which methods associated with the

interpretivist paradigm are being used in logistics and SCM research is increasing26.

Mangan et al. (2004) in considering the appropriateness of the two paradigms with

reference to logistics decision making note that:

It could be suggested that positivism is relevant for getting an overview and for

considering the broad structure of decisions, whereas phenomenology (i.e.

26 For example, Mentzer and Kahn’s (1995) paper reviewed all of the papers published in the Journal of Business Logistics between 1978 and 1993 and found that just 3.2% had used a case study approach; Sachan and Datta (2005) reported that 16.1% of papers used this method.

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interpretivism) is useful for finding out at the micro-level about the behaviour of

the decision maker (p. 568).

This mirrors a comment made by New and Payne (1995) almost a decade earlier, albeit

using slightly different language:

The most striking conclusion is that while logistics is a difficult area for relevant

empirical research, progress may be possible if the range of methodologies

employed expands to match the greater scope of the holistic interpretations of

logistics. “Soft” data – such as managers’ expectations or fears concerning the

behaviour of suppliers and customers – is as important as data on stock turns or

delivery patterns. This presents a considerable challenge to a predominantly

technical field (p. 74-75).

Both papers are suggesting a role for multi-paradigmatic positions, and the

consequential use of methodologically pluralist approaches, to enrich and develop

logistics and SCM understanding.

Amongst the recommendations of Sachan and Datta (2005) is an increased focus on the

use of “behavioral research methods” to develop new insights into what we know about

contemporary supply chains. They also note that as a result of the dominance of

positivist approaches research in the discipline “is not able to look at the system

holistically” (p. 675). Other authors – notably Naslund (2002) – have also called for

more research based on the interpretivist rather than the purely positivist paradigm.

Frankel et al. (2005) suggest that “good research is good research” and that:

It is important that in an evolving and applied field such as logistics that we utilize

multiple kinds of good research. In other words, researchers must provide good

examples of the application of different paradigms and methods. The key to

making that condition a reality is to understand, appreciate, and encourage a

diversity of perspectives and methods (p. 205).

This reinforces the points made above in relation to the need for multi-paradigmatic

approaches in logistics and SCM research.

In relation to the research described in this thesis, answering the research questions

requires that a range of insights be generated by viewing the research problem through

different philosophical perspectives. This helps to ensure that the issues being studied

are explored holistically and that the disadvantages associated with the adoption of

purely positivist or interpretivist positions are avoided. This in turn drives the

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methodological approach adopted, i.e. one which explores the research questions

through an appropriate combination of quantitative and qualitative methods.

3.3 Research Methodology

Research methodology is defined by Collis and Hussey (2009) as “an approach to the

process of the research encompassing a body of methods” (p. 337). According to

Saunders et al. (2009) choice of research methodology is guided by a number of factors.

These include:

• The research question and objectives;

• The researcher’s existing knowledge;

• The amount of time and resources available; and,

• The researcher’s philosophical underpinnings.

In any case, there are a wide variety of different possible methodologies and choosing

between them is the critical issue. It should be noted that these methodologies are not

mutually exclusive, i.e. a mix of strategies may be appropriate in seeking to answer a

particular research question or a set of related research questions. It should also be noted

that the process of research design involves deciding on the strategic approach to be

adopted and on which data collection and analysis techniques are most appropriate.

This section sets out the features of two main approaches to research (induction and

deduction, associated with the positivist and interpretivist positions respectively). It

goes on to discuss the distinction between quantitative and qualitative research (again

broadly associated with the positivist and interpretivist schools respectively). The

possible use of methodological pluralism in the context of triangulation is proposed as a

means of integrating the strengths and mitigating the shortcomings of quantitative and

qualitative methods. This section goes on to describe the characteristics of a number of

research methodologies which have varying degrees of appropriateness in answering the

research questions posed in this thesis. The specific methodologies discussed are case

studies, action research and grounded theory. The section concludes with an overview

of the broad methodological approach to be adopted in answering the questions set out

in Chapter 2.

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3.3.1 Research Approaches: Induction and Deduction

Scholars have long distinguished between inductive and deductive research (see Figure

3.3). Using the inductive approach, generalisations are made on the basis of particular

data that have been observed. According to Glaser and Strauss (1967), such approaches

reveal the real features of the examined phenomenon “a posteriori” as theory is an

outcome of the research process (i.e. “theory building”). This is the opposite of the

deductive approach, where observations and findings are used to test the “a priori”

assumptions of research (i.e. “theory testing”).

Figure 3.3: Inductive and Deductive Research Approaches

As noted in section 3.2.5 and illustrated in Table 3.1, the development and testing of

hypotheses and theory deductively is a characteristic of the positivist paradigm.

Interpretivists, on the other hand, try to build theory inductively. In line with the multi-

paradigmatic position adopted in this research, the research design is based on the

effective simultaneous use of inductive and deductive approaches. This is discussed in

detail in section 3.5.

3.3.2 Quantitative versus Qualitative Research

Many authors on methodological issues have discussed the distinction between two

fundamental strategies to studying business and other phenomena: the quantitative and

the qualitative strategy (see, for example: Martin, 1990; Hammersley, 1999; Denzin and

Lincoln, 2000). The distinction between the two methods gave rise to a debate

concerning their relative merits – one that in many ways mirrors the debate between

positivists and interpretivists. Nevertheless, the quantitative/qualitative distinction still

represents a useful way of classifying different business research strategies (Bryman

and Bell, 2003).

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In general, quantitative research is a research strategy that primarily seeks to emphasise

quantification in the collection and analysis of data, while qualitative research can be

considered a research strategy that usually emphasises words rather than quantification

in the collection and analysis of data. Generally, quantitative research involves the

statistical analysis of experimental, survey, archival and other data. The aim of

quantitative inquiry is to identify common patterns or processes characterising an

examined population and to derive explanations of cause-and-effect relationships. In the

context of a quantitative approach, the subject of the research process (i.e. the

researcher) is seen as a separate, distant entity from the object of investigation (Dachler,

1997). Quantitative research tends to adopt a rigid, structured approach: for example,

survey research is structured in the sense that sampling and questionnaire construction

are conducted prior to the start of data collection and then imposed on the sample

members. Data obtained from quantitative research are often depicted as hard, rigorous

and reliable. Since quantitative studies usually embrace a multitude of variables for a

large population, the large amount of resulting data has to be analysed by means of

statistical procedures to derive relevant information. There are certain general strengths

associated with the use of quantitative strategies. The first is that the use of statistically

representative sampling techniques allows for generalisation of findings to the entire

population (Scandura and Williams, 2000). The application of statistical procedures

makes it possible to examine relatively large samples. In addition, researchers can easily

replicate quantitative studies to corroborate or disprove previous evidence. One of the

main weaknesses in quantitative research is related to the fact that in many cases,

complex real situations cannot be simply reduced to numbers (Bentz and Shapiro,

1998).

Qualitative research, on the other hand, tends to emphasise processes and meanings that

are not experimentally examined or measured in terms of quantity, amount, intensity or

frequency (Denzin and Lincoln, 2000). Qualitative research involves the use of largely

non-mathematical analytical procedures that result in findings derived from data

gathered mainly through observation and interviews, but also through conversation,

books, documents and recordings. The aim of qualitative strategies is to understand and

interpret social phenomena in their real-life contexts. Therefore, qualitative researchers

investigate subjects in their natural settings attempting to make sense of phenomena in

terms of the meanings people bring to them (Denzin and Lincoln, 2000). Qualitative

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research tends to be flexible and open: data collection times and methods can be varied

as a study proceeds. The data obtained from qualitative analysis are usually described as

rich and deep conceptualisations of the social world (Denzin and Lincoln, 2000).

Qualitative research approaches have certain general strengths and weaknesses. A

strength of qualitative research can be found in the richness of data and the depth of

inquiry. This derives from the focus on events in natural settings and the flexibility

afforded by qualitative studies. However, as the time and effort involved in qualitative

research makes the in-depth examination of large numbers of situations difficult, the

generalisation of findings to entire populations is often questionable (Martin, 1990). In

addition, qualitative methods are more susceptible to researcher bias and reliability

problems (Snow and Thomas, 1994).

3.3.3 Combining Qualitative and Quantitative Strategies

In the academic debate on research methodology, the use of combinatory

methodological approaches is being increasingly emphasised as an option for

integrating the strengths and mitigating the shortcomings of quantitative and qualitative

methods. In fact, the traditional demarcation between quantitative and qualitative

approaches tends to underestimate the complexity of contemporary research problems

(Hammersley, 1999). The use of each approach in isolation tends to give only a

particular perspective. By contrast, the use of quantitative and qualitative methods in

combination may provide deeper insights as well as broadening the research

perspective. In this way, the use of multiple research approaches in combination may

provide valuable contributions to addressing the same research problem (Bartunek et al.,

1993). As noted by Bickman and Rog (1998), these multiple approaches – cutting

across quantitative and qualitative boundaries – are often needed to examine a topic

thoroughly and to provide substantial results. This is in line with the concept of

triangulation.

The term triangulation originates from navigation and military strategy and refers to the

use of multiple geographical reference points to locate an object’s exact position (Jick,

1979). Easterby-Smith et al. (2008) identify four different types of triangulation:

1. data triangulation, where data are collected at different times or from different

sources;

2. investigator (or observer) triangulation, where different investigators

independently collect data;

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3. methodological triangulation, where both quantitative and qualitative techniques

are employed; and,

4. theory triangulation (or triangulation of theories), where a theory is taken from

one discipline and used to explain a phenomenon in another discipline.

In the context of research methodology it is methodological triangulation, and to a

lesser extent data triangulation, which is arguably of most significance. The rationale for

triangulation relies upon the idea that the particular limitations of a given method will

be compensated by the counter-balancing strengths of another (Jick, 1979). Using

several data sources and measures of phenomena provides cross-checks on data

accuracy and enrichment of the conclusions researchers might reach (Harrigan, 1983).

However, a triangulation strategy has weaknesses. Firstly, replicating a mixed methods

package is often a nearly impossible task (Jick, 1979). Secondly, if the research is not

clearly focused conceptually or theoretically, even the most sophisticated combination

of methods will not produce satisfactory results. Thirdly, the researcher needs to be

trained in multiple methods and has to cope with various constraints in terms of time

and cost (Martin, 1990).

3.3.4 Case Studies

The use of a case study methodology is recognized as an effective means of collecting

in-depth information and can, therefore, complement the use of more quantitative

approaches such as questionnaire surveys (Voss et al., 2002). The main advantage of the

case study methodology is that the researcher can develop a detailed (i.e. deep and rich)

understanding of the case under consideration. However, the case study as a method

relies heavily on the perceptions, opinions, and perspectives of respondents and is hence

susceptible to response bias (Yin, 1998).

The use of case studies in SCM research has increased in recent years. Nevertheless, the

need for more case study analysis in the field has been emphasised by several scholars.

Chow et al. (1994), as a result of some of the inherent limitations of survey-based

research, invited journal editors to encourage case study methods in logistics and SCM

research. Ellram (1996) observed that the case study method is not well understood

particularly in the field of purchasing and logistics management research. Meredith

(1998) noted that case study methods continue to be rarely used in operations and

logistics management and documented the advantages and rigour of case study research.

Gammelgaard (2003), noting the lack of case approaches in logistics research, analysed

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a selection of 17 case studies from leading logistics/SCM journals to derive a

framework for understanding and conducting case analysis. She pointed out that to

increase the value for logistics research it is important to choose an appropriate strategy

for case study analysis. Finally, Juga (2003) argued that if case studies in logistics

research are built on solid theoretical bases they can be considered a valuable tool in

stimulating the dialogue between practitioners and academics and in promoting

improvement in logistics competencies.

3.3.5 Action Research

The first use of the phrase “action research” is usually attributed to Karl Lewin of MIT

in 1946 (Lewin, 1946). Easterby-Smith et al. (2008) define it as “an approach to

research which seeks understanding through attempting to change the situation under

investigation.” (p. 326). The term and concept have been used by management

researchers in a variety of ways over the years. Coghlan and Brannick (2005) suggest

that action research is research in action rather than research about action. In other

words, the research focuses on the resolution of organisational issues. Sometimes, the

term is used where practitioners are involved in some way in the research, in particular

where practitioners and researchers work in a collaborative manner. Eden and Huxham

(1996, p. 75) capture this approach to action research very effectively when they

describe it as being about “involvement [by researchers] with members of an

organisation over a matter which is of genuine concern to them”. In other words, the

researcher becomes part of the organisation in which the research is being carried. This

is very much in line with the epistemological stance adopted in the interpretivist

paradigm. A common approach to action research going right back to Lewin’s work in

the 1940s involves the concept of a “spiral” such as that illustrated in Figure 3.4.

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Figure 3.4: Action Research “Spiral” Modified from Lewin (1946)

The essence of the spiral is that action research is an iterative process. The process

involves a number of cycles of reconnaissance (or diagnosis or fact finding and

analysis), planning and taking action. At the end of each cycle, there is a period of

reflection, followed by additional reconnaissance leading to a new plan, along with the

necessary action to implement the new plan.

3.3.6 Grounded Theory27

Grounded theory was developed by Barney G. Glaser and Anselm L. Strauss in the

1960s (Glaser and Strauss, 1967), their book described by Bryman and Bell (2003) as

“one of the most widely cited books in the social sciences” (p. 427). Saunders et al.

(2009) describe grounded theory as a “research strategy in which theory is developed

from data generated by a series of observations or interviews principally involving an

inductive approach” (p. 593); Collis and Hussey (2009) describe it as “a methodology in

which a systematic set of procedures is used to develop an inductively derived theory

about a phenomenon”. The systematic set of procedures referred to is the approach set

out in Glaser and Strauss (1967). However, providing an accurate description of

grounded theory is difficult as many researchers have deviated considerably from the

original – and quite prescriptive – Glaser and Strauss approach. Furthermore, as noted

by Mangan et al. (2004), the phrase is now often used as a generic one for a variety of

27 Mello and Flint (2009) provide a useful overview of the background, objectives, and methodological issues of grounded theory in a logistics context “in order to better prepare researchers for some of the decisions they need to make when entering into a study” (p. 122).

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theory-building approaches that do not closely follow the original methodology.

Nonetheless, Collis and Hussey (2009) provide a very succinct description that captures

the essence of the approach:

The theoretical framework is developed by the researcher alternating between

inductive and deductive thought. Firstly, the researcher inductively gains

information that is apparent in the research data. Next, a deductive approach is

used to allow the researcher to turn away from the data, think rationally about the

missing information and form logical conclusions. When conclusions have been

drawn, the researcher reverts to an inductive approach and tests these tentative

hypotheses with existing or new data. By returning to the data, the deduced

suggestions can be supported, refuted or modified. Then supported or modified

suggestions can be used to form hypotheses and investigated more fully. It is this

inductive/deductive approach and the constant reference to the data that helps

ground the theory (p. 157).

Thus, the approach is an iterative (or recursive) one in the sense that data collection and

analysis proceed in tandem, repeatedly referring back to each other. This

inductive/deductive approach and the constant reference back to the data helps to

“ground” the theory (Bryman and Bell, 2003).

Bryman and Bell (2003) state that grounded theory “has become by far the most widely

used framework for analysing qualitative data” (p. 427). However, a note of caution is

sounded by Easterby-Smith et al. (2008):

It is important to note that ‘I’m doing grounded theory’, should not be used as a

justification for doing some vaguely qualitative research without any clear view of

where it is supposed to lead. Grounded theory contains precisely articulated

methods and presuppositions (p. 101).

However, these “precisely articulated methods and presuppositions” can result in the

process becoming, as observed by Mangan et al. (2004), “somewhat complex” (p. 576)

and prescriptive.

3.3.7 Methodology in this Research: Methodological Pluralism

The overall methodology to be adopted in the research described in this thesis is based

on methodological pluralism. The choice of such an approach allows a clearer and more

detailed picture of the phenomena being investigated to be developed.

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However, it is important to emphasise that the use of multiple-method approaches based

on the triangulation principle is not in itself what methodological pluralism is about.

Rather, it is concerned with the effective use of a range of appropriate methods as part

of an integrated research design. The various methodological approaches need to

complement each other as integral elements of a cohesive overall strategy. In this way,

the dangers of naïve empiricism are minimized. Naïve empiricism is a term which is

often used to indicate fact-finding without any reference to the theoretical

underpinnings of a subject. As noted by Bryman and Bell (2003), some “fact-finding

exercises” should not be dismissed prematurely as naïve empiricism. This point is

relevant to the current research as:

1. The extent to which SCM practices have been adopted by firms in Ireland is

of interest in itself, given their potentially important role in the improving

competitiveness of firms; and,

2. As noted in section 2.6, there is no “unified theory” of SCM or logistics.

Furthermore, it is proposed that the RQs posed in this thesis will be addressed using the

Four Fundamentals construct as a frame of reference. This construct has itself been

developed based on a detailed review of the existing body of SCM knowledge (see

Chapter 2). This, and the adoption of combinatory methodological approaches, is aimed

at ensuring that the work described in this thesis:

1. Is of practical value to practitioners and policy-makers by providing a

detailed understanding of the current SCM landscape in Ireland; and,



Thus, and as highlighted earlier, this research is not simply an exercise in fact-finding in

an Irish context; it also seeks to support the building and testing of SCM theory.

As noted in section 3.3.1, inductive research is largely concerned with theory building,

while deductive research is primarily focused on theory testing. A further important

feature of the research design in this project is its emphasis on the effective

simultaneous use of inductive and deductive approaches. There is no reason why these

approaches should be seen in any way as mutually exclusive. On the basis of their

analysis, Croom et al. (2000) stated that “we feel that the inductive/deductive

dichotomy is best addressed through the constant reflection of empirical against

theoretical studies.” (p.75). However, few scholars have adopted this advice with the

great majority of studies continuing to fall into the deduction (or “empirical-

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descriptive”) category. However, the work of Storey et al. (2006) stated in relation to

their case-based research design that, “This kind of dual theoretical and empirical

approach is in tune with the point made by Croom et al. (2000)” (p. 763). Indeed, some

of the principles of the grounded theory methodology (see section 3.3.6) are in evidence

here in that the approach adopted is an iterative (or recursive) one with data collection

and analysis carried out in tandem, repeatedly referring back to each other. The

effective use of case studies has the potential to generate insights into some of the RQs

posited by the author. However, the disadvantages associated with this methodology,

particularly in relation to identification of appropriate case companies and

generalisability of findings, are such that its value as part of the author’s research design

is somewhat limited. Similarly, while the action research concept of the researcher

working collaboratively with practitioners is relevant in this context, its specific focus

on understanding the implications of change is such that its value in the current research

is quite restricted.

3.4 Research Methods and Techniques

It was noted in section 3.3 that research methodology is as “an approach to the process

of the research encompassing a body of methods” (Collis and Hussey, 2009, p. 337). In

this context, the use of combinatory (i.e. mixed-methods) approaches is being

increasingly emphasised as an option for integrating the strengths and mitigating the

shortcomings of various quantitative and qualitative techniques – the essence of

methodological triangulation. In order to explore the specific questions posed in this

thesis, an appropriate research design should adopt a variety of empirical methods and

techniques to enable a comprehensive coverage of the issues being investigated.

Therefore, and as discussed in section 3.3.7, a multiple-method approach in the form of

triangulation provides the methodological basis for the empirical part of this thesis. The

following sections describe four methods or techniques each of which has potential in

addressing the research questions posed in this thesis – surveys, focussed interviews,

focus groups and ethnography.

3.4.1 Surveys

In line with its largely positivist tradition, questionnaire surveys have been widely used

in SCM and other business research for many decades and continue to play a key role.

There are several reasons for the widespread use of this technique.

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Firstly, a survey’s prime advantage is its efficiency in terms of speed and cost in

generating large amounts of data that can be subjected to statistical analysis (Snow and

Thomas, 1994). Surveys allow for large numbers of respondents to be surveyed even if

the respondents are widely distributed geographically (Mangione, 1998). Survey

research is especially well suited for answering questions concerning “what is

happening?” (Pinsonneault and Kraemer, 1993). Moreover, surveys are particularly

useful when the research goal is to provide a description of the incidence or prevalence

of a phenomenon (Yin, 1994). In addition, surveys have inherent advantages compared

to other methods in that they allow respondents to answer questions at times that are

convenient, to see the context of a series of questions, to take time in answering, and to

look up information as required (Mangione, 1998). Furthermore, in comparison to other

data collection methods (e.g. interviews – see section 3.4.2), the use of the survey

method eliminates interviewer bias.

Not surprisingly, as with each empirical method, surveys have potential weaknesses:

one major limitation is their typically low response rate. Low response rates are

problematic because they reduce confidence concerning the extent to which survey

findings can be generalised to the entire population from which the survey is drawn

(Snow and Thomas, 1994). Another potential problem area relates to response errors

due to ambiguous wording and lack of interactivity (Mangione, 1998). Attention to

detail in questionnaire design and testing is critical if the impact of this potential

problem area is to be minimized.

3.4.2 Focussed Interviews

The purpose of interviews is not to conclusively test hypotheses but to help the

researcher understand the experiences of the interviewees. In-depth qualitative

interviews are most appropriately used when a rich, detailed, holistic picture is needed

of people’s experience and how they interpret it, and when the study is exploratory in

nature. Traditionally, a number of different interviewing approaches have been used in

research (Merton et al, 1990; Collis and Hussey, 2009).

A structured interview , sometimes called a standardized interview, involves the

administration of an interview schedule by an interviewer. The main aim is for all

interviewees to be given exactly the same context of questioning. This is to ensure that

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replies can be aggregated – this can only be reliably achieved if all replies are given in

response to identical cues. Questions are usually very specific and often offer

respondents a fixed range of answers (i.e. closed questions).

An unstructured interview is similar in many ways to a conversation. The interviewer,

often using at most an aide-memoire as a set of prompts, allows the interviewee to

respond freely. The interviewer responds to points deemed worthy of follow-up. An

unstructured interview may be based on just a single question.

Both structured and unstructured interviews have advantages and disadvantages. A

focussed (or semi-structured) interview is an attempt to combine the advantages of

both. In this case the interviewer has a list of questions on fairly specific topics to be

covered (an interview guide) but allows the interviewee some latitude in how questions

are answered. Interviewers may deviate from the precise questions in the guide based on

responses given by the interviewee. For example, the order in which questions are asked

may vary and questions not included in the guide may be asked.

3.4.3 Focus Groups

The focus group is essentially a structured group process used to obtain detailed

information about a particular topic. Bryman and Bell (2003, p. 368) defines the focus

group method as:

a form of group interview in which: there are several participants (in addition to

the moderator/facilitator); there is an emphasis on questioning on a particular

fairly tightly defined topic; and, the accent is upon interaction within the group

and the joint construction of meaning.

The focus group is particularly useful for exploring a specific theme or topic in depth

and for drawing out precise issues that may be unknown to the researcher. It allows

elements of two other methods (i.e. group interviews and focussed interviews) to be

combined. As focus group discussion involves people probing each other’s reasons for

holding a certain view, the researcher is able to obtain a more realistic perspective on a

particular topic.

The number of participants involved in a focus group discussion will vary. Generally, it

ranges from six to ten participants who are brought together to discuss a clearly defined

topic (Morgan, 1998). Typically, focus groups have a homogeneous composition, all

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representing a particular segment of the population. A group moderator/facilitator keeps

the discussion on track by asking a series of open-ended questions designed to stimulate

discussion. This creates the potential to explore topics in detail and to draw out precise

issues that may be unknown to the researcher. As a result, the use of this method may

provide several advantages, but there are also a number of limitations.

The main advantages associated with the use of the focus group method are as follows:

• a focus group can generate a large amount of data in a short period of time and

the findings may be used to precede quantitative techniques (Morgan, 1998);

• social interaction in a focus group environment can produce new insights into

the topic investigated. It enables the researcher to learn or confirm not just the

facts (as in survey methods) but the meaning behind the facts (Krueger and

Casey, 2000);

• a focus group can be a more flexible technique in comparison with the use of

surveys. In a focus group discussion, the researcher can probe for clarification

and solicit greater detail (McDonald, 1993); and,

• focus groups are relatively easy to undertake and are relatively cost-effective

(Bryman and Bell, 2003).

Nevertheless, the focus group method has a number of limitations that may affect its

research potential:

• a focus group may provide useful data that lead to important insights in relation

to the topic under investigation, but they are not set up to generalise in the same

way as survey research (Fern, 2001). In other words, because the group is

generally hand-selected, the results may not be representative of the general

population (Morgan, 1998);

• the researcher has less control over the process than in other qualitative

techniques such as individual interviews (Bryman and Bell, 2003);

• there are a number of circumstances in which focus groups may be

inappropriate. For example, Madriz (2000) argues that when participants are not

comfortable in each other’s presence or when participants are likely to disagree

profoundly with each other, this may cause biased responses;

• a focus group is often difficult to assemble and it requires a highly skilled

moderator (Bryman and Bell, 2003); and,

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• the large amount of data produced by focus groups can be difficult to analyse

and transcription is generally more time-consuming than with individual

interviews (Bryman and Bell, 2003).

The focus group method is a well established technique in various fields of social

research such as psychology and human resources. The method has also been applied in

management and business research, in particular in marketing, and there is a substantial

body of literature dealing with focus group implementation in this field (for example:

Fern, 2001; McDonald, 1993; Calder, 1977).

To maximize the benefits of using a focus group, identification of a skilled moderator is

of critical importance. This moderator creates an environment in which the participants

who do not know each other feel relaxed and encouraged to exchange views and ideas

about the topic being investigated. In terms of participant selection, most scholars (e.g.

Krueger and Casey, 2000) recommend that participants should not know each other,

thus encouraging a more honest and spontaneous expression of views and a wider range

of responses. It also helps to prevent set behaviours relating to pre-existing relationships

and patterns of leadership in the group (Thomas et al., 1995).

3.4.4 Ethnography and Participant Observation

Saunders et al. (2009) describe ethnography as a “research strategy that focuses upon

describing and interpreting the social world through first-hand field study” (p. 591).

According to Collis and Hussey (2008) it is a “methodology in which the researcher

uses socially acquired and shared knowledge to understand the observed patterns of

human activity” (p. 79). The main method of data collection is participant observation.

Indeed, as noted by Bryman and Bell (2003) the term “ethnography” and the phrase

“participant observation” are often used interchangeably and it is difficult to distinguish

between many definitions of these terms. They also (2003) state that:

It is possible that the term ‘ethnography’ is sometimes preferred because

‘participant observation’ seems to imply just observation, though in practice

participant observers do more than simply observe (p. 316).

In any case, all definitions note the fact that the ethnographer immerses him/herself in a

group for an extended period of time. During this time, he/she observes the behaviour of

participants, noting what is said in conversations, and asking questions as appropriate.

As such, ethnography tends to be used by researchers from the interpretivist tradition.

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The approach lends itself to the generation of deep and rich knowledge about specific

situations and phenomena. However, as with all research methods, there are some

potential disadvantages associated with ethnography and participant observation.

Hussey and Hussey (1997), for example, cite a variety of problems with the technique.

A key issue is that of generalisability, i.e. whether it is possible to generalise from

specific cases of participant observation.

3.4.5 Research Methods and Techniques Used in this Research

New and Payne (1995) suggested that in the field of empirical research in logistics and

SCM, significant progress can be achieved through expanding the range of methods

employed. They went on to propose a model based on case studies combined with

surveys as a way of extending the explanatory power of the case approach to a wider

range of organisations. Since then, several other logistics and SCM scholars have made

similar suggestions with, in particular, many calls for more qualitative studies to

generate deeper and richer understandings of key phenomena (see, for example:

Seuring, 2005; Sachan and Datta, 2005; Mangan et al., 2004). Eisenhardt (1989) argued

that qualitative data allow:

1. better understanding of quantitative data; and,

2. improvements in the interpretation of relationships revealed by survey data

analysis.

In this thesis, information generated by focussed interviews and focus groups will have

this function as they will be used in combination with survey data.

The author’s analysis of the methodological approaches used in previous empirical

research in the SCM field reveals a strong emphasis on the use of single-method

approaches (see Appendix 7)28, with the great majority of studies making exclusive use

of questionnaire surveys. The advantages of the latter are such that they will play a key

role in the current research. However, the value of the proposed survey will be enhanced

by using it in conjunction with a range of other, more qualitative, methods.

The following sections discuss the specific research methods and techniques to be used

in this research with a particular emphasis on the role of each in the context of the

28 This mirrors the reviews carried out by Dunn et al. (1994), Mentzer and Kahn (1995) and Samuel (1997) in the 1990s, and more recently by Sachan and Datta (2005), Frankel et al. (2005) and Spens and Kovacs (2006).

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overall combinatory methodological approach, i.e. in the context of methodological

pluralism.

Surveys

As discussed earlier, notwithstanding some of the limitations associated with their use,

the prime advantage of surveys is their efficiency in terms of speed and cost in

generating large amounts of data that can be subjected to statistical analysis (Snow and

Thomas, 1994). As survey research is especially well suited for answering questions

concerning “what is happening?” (Pinsonneault and Kraemer, 1993), it provides an

efficient means of investigating levels of SCM adoption. Moreover (and as noted

earlier), surveys are particularly useful when the research goal is to provide a

description of the incidence or prevalence of a phenomenon (Yin, 1994). This is in line

with some of the overall research questions being explored – in particular RQ2 – in this

thesis. For these and other reasons, use of a survey – as one element of an overall

mixed-method approach – provides a potentially efficient means of investigating many

of the issues and questions under consideration. Furthermore, in comparison to other

(more qualitative) data collection methods, the use of the survey method eliminates

interviewer bias.

Focussed Interviews

As noted in section 3.4.2, the purpose of an interview in research is to help the

researcher understand the experiences of the interviewees. As such, it has potential in

this project. It is important to recognise that capturing a range of perspectives is in itself

of value as there are few “rights and wrongs” in a real-world domain such as SCM. In

other words, the researcher can generate insights by understanding the points of view of

a range of practitioners, based on their experience in a variety of settings. Furthermore,

in-depth qualitative interviews are most appropriately used when the study is

exploratory in nature (see, for example, Schensul et al, 1999). In this context, a rich and

detailed picture of people’s experience and how they interpret it is often needed. Given

the exploratory nature of many of the questions which the research described in this

thesis attempts to answer, interviews have a role to play as part of the overall design.

As focussed (or semi-structured) interviews attempt to combine the advantages of both

structured and unstructured interviews, they represent the most effective way of

gathering the information required. An element of structure ensures that all possible

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dimensions of the topic in question which are of interest in the research are discussed;

however, there is also an element of flexibility in the execution of the method.

Analysis of previous SCM empirical research suggests that little use has been made of

focussed interviews – certainly as a research method in its own right. In the context of

surveys, several authors report the use of telephone interviews as part of a

predominantly quantitative methodology. For example: Auramo et al. (2005) reported

the use of 48 telephone interviews; Sezen (2008) conducted face-to-face interviews with

125 managers from manufacturing companies in Turkey; Toyli et al. (2008) used a mix

of a web-based questionnaire and interviews29. In the context of case study research, the

use of interviews (including focussed interviews) is inevitably an important approach.

For example, Storey et al. (2006) in their study of Marks and Spencer report the use of

very detailed and extensive semi-structured interviews with key informants from the

focal company (past and present) and their key suppliers.

Focus Groups

In general, the trend in management research is toward the expansion of methods and

approaches including more qualitative methods, often triangulated with quantitative

approaches (Mangan et al., 2004). Despite the increasing use of qualitative techniques

(e.g. case studies, observations and other forms of action research) in logistics and SCM

research over the last few years, their overall level of acceptance remains relatively low

(Naslund, 2002; Craighead et al., 2007). This is particularly true in the case of the focus

group method as confirmed by the work of Frankel et al. (2005). In their review of

logistics research methods the authors analysed 108 articles published in the Journal of

Business Logistics from 1999 to 2004. They found that focus groups were used in just

three of these papers. The work of Maloni and Carter (2006) and Selviaridis and Spring

(2007) reveals a similar situation in relation to logistics research in the specific area of

3PL.

For the research described in this thesis, the focus group is particularly useful for

exploring a specific theme in depth and for drawing out precise issues that may be

unknown to the researcher. The major benefit associated with the use of this method in

29 However, the research design adopted in that study is inadequately explained in this paper.

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this work is that the researcher is able to obtain a more realistic perspective on particular

topics, as a result of people probing each other’s reasons for holding a certain view.

Ethnography and Participant Observation

Whilst it is not intended to use classic ethnographic methods – as applied in, for

example, anthropological research (see section 3.4.4) – elements of participant

observation may have a role to play as part of: (i) focus group implementation; and

(albeit to a lesser extent), (ii) the execution of focussed interviews.

3.5 Overall Research Design

As noted in section 3.2.7, the research described in this thesis adopts a multi-

paradigmatic philosophical approach. In line with this positionality, the research

methodology adopted is based on methodological pluralism and uses a mix of inductive

and deductive – and quantitative and qualitative – approaches (see section 3.3.7). As set

out in section 3.4.5, an appropriate mix of methods and techniques will be implemented

as part of this methodologically pluralist design.

Before describing the overall research design to be adopted in this project it is worth

restating the overall research questions set out in section 2.15 – these are shown in

Table 3.2 (below).

Table 3.2: Overall Research Questions

An overview of the overall research design is shown in Figure 3.5. The chosen design

attempts to view the issues under consideration from a variety of perspectives. It uses a

range of methods and techniques, some associated primarily with the positivist tradition

and others with the interpretivist school. In this context, as Collis and Hussey (2009)

noted in relation to interpretivist approaches, it should be recognised that this is an

emerging design in that a variety of factors are being studied simultaneously and it is

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expected that new issues will emerge during the research. The design comprises three

phases: (i) focussed interviews; (ii) focus groups; and, (iii) a questionnaire survey.

While each phase aims to address one or two of the RQs specifically as shown in Figure

3.5, the research has been designed so that all phases can potentially contribute to the

generation of insights into all RQs. This is the essence of the integration concept in the

context of methodological pluralism.

RQ1, with a focus on assessing the level of understanding of SCM is – by definition –

largely qualitative in nature. The author believes that interviews, particularly focussed

(i.e. semi-structured) interviews, are the ideal vehicle for answering this question. A

series of semi-structured interviews with key informants, using the Four Fundamentals

construct as the basis, will provide data to support the effective answering of this

question. The essence of the approach will be to measure understanding of SCM by

making specific reference to the Four Fundamentals as a definitional construct. It is

proposed that additional insights will be generated using a series of focus groups

comprising decision-makers from key industry sectors. This stage of the research will

be largely inductive and exploratory in nature. Whilst it may not be a theory building

process in the classic inductive manner, it will attempt to build upon an existing theory

(namely the Four Fundamentals construct) through the development of deep and rich

insights into some of its key elements.

Figure 3.5: Overall Research Design

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RQ2 is – by definition – more quantitative in nature. It is simply seeking to measure the

level of adoption of SCM. The author’s contention is that once SCM has been clearly

defined this question can then be easily answered using an appropriately constructed

survey questionnaire. In this case, the Four Fundamentals (built upon based on

answering RQ1) will be the definitional construct used and the level of SCM adoption

will be measured with reference to its constituent elements. This stage in the process is

largely deductive in that a large volume of survey data will be used to answer a range of

detailed questions, developed based on the literature and the insights generated during

the first part of the research (i.e. in answering RQ1). This will be supplemented with the

deeper and richer insights generated using the focus groups sessions in an inductive

manner as appropriate. In this way, the research allows the exploratory research in

relation to RQ1 to be built upon, but goes further by attempting to explain some of the

phenomena under investigation – i.e. the research combines exploratory and explanatory

dimensions.

RQ3 is again much more qualitative in nature. Whilst some general ideas may emerge

from carefully constructed survey questions, it is proposed that the emphasis in

answering this question will, as with RQ1, rely largely on focussed (i.e. semi-

structured) interviews with key informants and on focus groups made up of decision-

makers from a range of key industry sectors. Overall, the purpose with RQ3 is to

inductively develop a comprehensive list of critical success factors and/or inhibitors to

success using a mix of focussed interviews and focus groups.

Answering RQ4 will require a detailed analysis of all primary and secondary data

collected during the project.

The following sections describe the detailed design of the focussed interviews (3.6),

focus groups (3.7) and questionnaire survey (3.8) phases of the overall research design.

3.6 Phase I: Focussed Interviews

3.6.1 Background

In an effort to address an important aspect of RQ1, the author will carry out a small

scale survey aimed at generating some insights into the use of the phrase supply chain

management and the word logistics. This involves interviewing managers from two

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third party logistics (3PL) providers / distributors, two retailers and two manufacturers,

and is to a large extent a replication of the work of Lummus et al. (2001). Such

replication reflects a call by Evanschitzky et al. (2007) regarding marketing studies and

Neuliep (1991) regarding social science research. Evanschitzky et al. cautioned

practitioners that:

scientific findings rest upon replication... few results in marketing have been

successfully replicated... given these results, practitioners should be skeptical

about making decisions based on the findings of the predominantly single-shot

studies reported in the leading marketing journals (2007, p. 413).

It adopts the lesson of Geertz (1973, p. 5) who stated that:

If you want to understand what a science is, you should look in the first instance

not at its theories or its findings. You should look at what the practitioners do.

As outlined in section 2.15.4, RQ1 asks: “What is the current level of understanding of

SCM in practice?” The focus of this part of the research is on gaining deep insights into

practice, particularly in relation to the fundamental issue of how practitioners define the

key words and phrases. A series of semi-structured (i.e. focussed) interviews with key

informants will provide data to:

i. assess the level of understanding of practitioners, specifically in relation to the

use of the phrase supply chain management and the word logistics; and,

ii. build upon and refine the Four Fundamentals construct.

However, as stated by Lummus et al. (2001, p. 428-429) in relation to their study:

This is not meant to be a definitive sample, nor are we implying that the sample

can be generalized to all professionals and industries. Instead, it shows examples

of how the terms are currently used in industry.

The same caveats apply to the current research. Nonetheless, the research adopts a

similar approach and aims to generate fresh perspectives. Specifically, the current work

relates to the situation towards the end (i.e. 2009), rather than at the beginning (i.e.

2001) of the decade. The extent, if any, to which thinking has progressed is of interest.

Furthermore, the context of the current work is Ireland (Lummus et al. (2001) is based

on the US). The extent, if any, to which geographical differences exist is also of interest.

3.6.2 Data Collection

The sample comprises two manufacturers, two third party logistics (3PL) providers /

distributors and two retailers. All are based in Ireland. The first manufacturer

(Manufacturer 1) is a US electronics multinational with a large production facility in

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Ireland. The second (Manufacturer 2) is a large indigenous producer of food and allied

products. The first 3PL (3PL1) carries out a range of warehousing, freight forwarding

and other logistics services for customers across a number of sectors. The second

(3PL2) is a major distributor of pharmaceutical products. The first retailer (Retailer 1) is

a major department store which sells a wide range of products. The second (Retailer 2)

is a small online retailer which specialises in the sale of jewellery and related products.

This sample of companies handles a wide variety of product groups thus enabling the

author to generate a breadth of perspectives.

Individual respondents are senior managers with responsibility for supply chain and

logistics management issues. Each was sent a copy of the following three questions:

• How do you define supply chain?

• How do you define logistics?

• How are these areas (i.e. supply chain and logistics) related?

The research then involved carrying out focussed (i.e. semi-structured) interviews with

each respondent30. This allowed the interviews to be based on these specific topics

while providing the interviewee with some latitude in how questions are answered.

Most interviews deviated from the precise questions based on responses given by the

interviewee. The order in which the questions were asked varied and additional

questions were asked where appropriate. This was useful as it allows issues that relate to

RQ2, RQ3 and RQ4 (in addition to the core focus on RQ1) to emerge. Interviews were

recorded and transcribed.

Whilst this research used Lummus et al. (2001) as its basis, it is unclear from their paper

precisely what data collection approach was adopted. Their paper simply states that

“each respondent was asked to reply to each question” (p. 429). Whether this was done

using a simple questionnaire or through face-to-face interviews is not stated explicitly.

If the former approach was adopted then the scope for exploration of some of the

detailed issues of interest is clearly limited. This lack of a detailed description of the

methodological approach adopted makes exact replication impossible. However, the

combination in the current research of a simple questionnaire and detailed focussed

30 In addition to the specific issues raised in this section, the author was mindful of the advice provided by many scholars in relation to good practice in conducting interviews (in particular: Easterby-Smith et al., 2008; Bryman and Bell, 2003; Robson, 2002; Denzin and Lincoln, 2000; Collis and Hussey, 2009). He found Saunders et al. (2009) particularly instructive in this regard (see Chapter 10, pp. 318-359).

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interviews enabled the author to collect the necessary information effectively. A

detailed discussion of the findings is presented in Chapter 4.

3.7 Phase II: Focus Groups

3.7.1 Background

In essence, as noted by Bryman and Bell (2003, p. 369-70) the focus group technique

provides the “opportunity to study the ways in which individuals collectively make

sense of a phenomenon and construct meanings around it”. As noted earlier in this

chapter, research in logistics and SCM has traditionally been based largely on the

positivist paradigm with predominantly quantitative approaches adopted by researchers.

In this context, in their paper on the application of the focus group method in logistics

research, Sanchez Rodrigues et al. (2010, p. 77) state that:

Statistical validity is often gained, however, at the expense of a deeper

understanding of attitudes, behaviour and processes, much of which requires the

collection and interpretation of qualitative data.

In relation to the potential use of the focus group method in logistics and SCM research,

they go on to claim that:

Logistics research is often rigorous in methodological terms but does not

necessarily reflect reality, as problems need to be simplified to reduce the high

level of complexity that real-world business scenarios present (p. 78).

Sanchez Rodrigues et al. (2010) also provide a useful overview of previous logistics

research that involved the use of focus groups or “workshops” and classifies them “into

a number of categories, reflecting the main types of research identified by Saunders et

al. (2007)” (p. 78). These categories are descriptive, exploratory and explanatory –

Appendix 8 shows this classification. In their concluding remarks, Sanchez Rodrigues et

al. (2010, p. 90) state that:

In terms of methodological contribution, focus groups can be used to

complement other methods and can add both breadth and depth to a logistics

research project. A well-managed focus group discussion can very usefully

supplement qualitative literature reviews or quantitative questionnaire surveys.

They refer specifically to the usefulness of the focus group method in refining

conceptual models at an early stage in a research project – this is precisely how the

method is used by the author as part of the research design in this project in relation to

the Four Fundamentals construct.

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This section describes the detailed design of the focus group component of the author’s

empirical work based on a generic process proposed by Sanchez Rodrigues et al. (2010)

and shown in Figure 3.6 (below).

Figure 3.6: Detailed Focus Group Design Process

The following sections discuss the specific focus group design issues of group

composition (3.7.2) and group size (3.7.3), followed by a summary of pertinent issues in

these areas as they apply to the current research (3.7.4). Section 3.7.5 goes on to explain

how the focus group sessions were conducted with specific reference to structured

versus unstructured approaches, venue/layout and facilitation issues. Section 3.7.6 then

sets out some of the main considerations in terms of how the data collected should be

analysed.

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3.7.2 Group Composition

In relation to focus group composition, Blackburn and Stokes (2000, p. 51) note that:

Whilst it is accepted that these focus groups can not aim to be truly

representative of the population as a whole, it is important to ensure that the

results could be illustrative of the possible regional and sectoral variations and

therefore provide a limited level of generalizability for the results.

Their work stratified participants according to business and personal criteria, including

gender, with a range of business sectors represented (including manufacturing,

construction and services). In general, it is recognised that, as stated by Bryman and

Bell (2003, p. 377), “a wide range of stakeholders from different organisations is

required”.

Some researchers prefer to exclude people who know each other on the grounds that

pre-existing styles of interaction or status differences may contaminate the session. For

example, Morgan (1998) suggests that one problem with using natural groups is that

people who know each other well are likely to operate with “taken-for-granted”

assumptions that they feel do not need to be brought to the fore. He goes on to suggest

that, if it is important for the researcher to bring out such assumptions, groups of

strangers are likely to work better. Bryman and Bell (2003) suggest that a general

approach to the conduct of focus group research involves the researcher navigating the

channel between, on the one side, addressing the research questions and ensuring

comparability between sessions, and, on the other side, allowing participants to raise

issues they see as significant and in their own terms. The facilitator plays a key role in

ensuring that this balance is achieved (see section 3.7.5 below).

Many scholars have distinguished between the use of homogeneous and heterogeneous

groups. Table 3.3 sets out some of the main characteristics of these types of groups,

with specific reference to the background, position and experience of participants.

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Homogeneous groups

Have a common background, position or

experience, which

• facilitates communication;

• promotes an exchange of ideas and

experiences;

• gives a sense of security in expressing

conflicts or concerns; and,

• may result in “groupthink” (i.e. unquestioning

similarity of position or views).

Heterogeneous groups

Differ in background, position or experience,

which

• can stimulate and enrich the discussion;

• may inspire other group members to look at

the topic in a different light;

• may risk power imbalances;

• can lead to a lack of respect for opinions

expressed by some members; and,

• can lead to some participants dominating the

discussion, thus destroying the group process.

Table 3.3: Characteristics of Homogeneous and Heterogeneous Focus Groups Based on Brown (1999) and Robson (2002)

In relation to logistics research specifically, Sanchez Rodrigues et al. (2010, p. 87) state

that: “the first lesson learned is that a focus group does not just depend upon its size and

composition”, despite the strong emphasis placed on these two aspects in the focus

group literature. They specifically emphasized what they classified as “uncontrollable”

and “controllable” factors (see Figure 3.7).

“Uncontrollable” factors relate directly to the participants; “controllable” factors are

described by Sanchez Rodrigues et al. (2010, p. 87) as those “which the research team

can influence”. This is a little misleading in that the research team determines the

composition of the focus group and thus has a degree of control over the so-called

“uncontrollables”. This is implicitly recognised in the “invitation” component of the

“Design” element of the “controllable” factors. Nonetheless, the lessons elucidated by

Sanchez Rodriques et al. (2010) from their analysis of a range of logistics-based focus

group research were valuable to the author in determining the composition of the focus

groups, as well as in relation to the actual conduct of the groups.

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Figure 3.7: Factors Influencing Focus Group Effectiveness Source: Sanchez Rodrigues et al. (2010, p. 88)

In the author’s research three focus groups were conducted at this stage of the project. It

was considered that three were sufficient as data saturation had been reached at this

point (see section 3.7.6 below). In terms of composition they represented an attempt to

combine the best elements of homogeneous and heterogeneous groups. Each of the

three groups was homogeneous in that all participants had extensive experience of SCM

and logistics. Each of the three groups was also heterogeneous in that it comprised

representatives from a range of different sectors and with a wide variety of different

academic and experiential backgrounds. This approach was adopted with the aim of

integrating the strengths and mitigating the shortcomings of the two alternative

approaches. Appendix 9 contains information about the structure of each group in terms

of job responsibilities, sectors (including a short profile of each participating company),

nationality and gender. Section 3.7.4 describes the composition of each focus group in

more detail.

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3.7.3 Group Size

As noted in section 3.4.3, the number of participants involved in a focus group

discussion will vary, with Morgan (1998) suggesting that it generally ranges from six to

ten participants. Collis and Hussey (2009) advise five to ten participants. Bryman and

Bell (2003) noted that the participation of at least four suitably experienced and

knowledgeable people are usually required for useful insights to be generated.

Blackburn and Stokes (2000) found groups of more than eight difficult to manage. In

determining the number of invitees, the issue of possible “no-shows” and resultant need

to over-recruit has been identified by a number of authors, notably Wilkinson (1999).

Figure 3.8 depicts how group size can influence group discussion controllability and the

quality of the data generated. Based on this, Krueger (1998) suggests that in order to

achieve ideal levels of data richness and group control, a focus group session should

have between six and ten members (i.e. broadly in line with Morgan (1998) and Collis

and Hussey (2009)). If a focus group session has more than ten members, the facilitator

needs to apply alternative strategies to manage the group effectively (e.g. splitting it into

smaller groups). If there are fewer than six participants, the group discussion can be

poor and the resulting insights generated limited. However, if the group members are

experts in the particular field, the minimum acceptable number of members is four,

since each participant has a greater contribution to make in terms of knowledge and

insight. This is in line with the suggestion of Bryman and Bell (2003).

Figure 3.8: The Effect of Group Size on Quality and Controllability Source: Modified from Krueger (1998) and Sanchez Rodrigues et al. (2010)

In this research, the three groups comprised twelve, ten and six participants respectively

(i.e. 28 individuals in total participated). This is broadly in line with the guidelines set

out above but with the first group somewhat larger than that recommended by the

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scholars cited. This was partly a result of over-recruiting but the author did want to

solicit the views of as a wide a range of people as possible. As the group dynamic is

likely to vary significantly with size, selecting groups of different sizes allows different

sets of group dynamics to be created. Given that the focus group method aims to

explore collective (i.e. rather than individual) experience and perspectives, this in itself

may be beneficial in generating new insights.

3.7.4 Summary of Composition and Size of Focus Groups

Appendix 9 contains information about the structure of each group in terms of job

responsibilities, sectors (including a short profile of each participating company),

nationality and gender.

Of the 28 individuals who participated (i.e. twelve in FG1, ten in FG2 and six in FG3),

Figure 3.9 shows the breakdown of the groups in terms of broad industry sector. The

“manufacturing” category includes firms involved in the food and beverage,

pharmaceutical and electrical equipment sectors. In some cases, the participant’s

company was involved in more than one of these broad sectors (e.g. both manufacturing

and distribution). In such cases, that aspect of the business that represents the greater

proportion of company turnover determined how the firm was categorized.

0 5 10 15

Number of Participants

1

2

3

Fo

cus

Gro

up

Manufacturing

3PL/Distribution

Public Sector

Software

Figure 3.9: Focus Group Sectoral Breakdown

The focus group composition was also set up in such a way as to ensure that a common

frame of reference existed across the three groups. For example and as illustrated in

Figure 3.10: both FG1 and FG2 had a representative from MAN1 (a different person in

each case); both FG1 and FG3 had a representative from MAN6 (again a different

person in each case); and, FG2 and FG3 had a representative of PS1 (also a different

person in each case). This ensures a degree of consistency across the groups and

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facilitates comparisons across the three groups. Using a different person from the same

company in different groups (i.e. as opposed to the same person participating in

multiple groups) also maximises the number of views solicited.

Figure 3.10: Company Overlap across Focus Groups

In terms of nationality (see Figure 3.11), the majority of the participants were Irish (18

out of 28) with all of the remainder citizens of other European Economic Area

countries31. In relation to gender (see Figure 3.12) the majority were male (18 out of

28). However, it should be noted that neither nationality nor gender were used as

selection factors.

8 4

5 5

5 1

0 5 10 15


1

2

3

Fo

cus

Gro

up

Irish

Other EEA

Figure 3.11: Nationality of Focus Group Participants

10 2

6 4

4 2

0 2 4 6 8 10 12


1

2

3

Fo

cus

Gro

up

Male

Female

Figure 3.12: Gender of Focus Group Participants

31 Germany, Poland (2), France, UK (2), Estonia, Denmark, Latvia, Iceland.

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3.7.5 Conducting the Focus Groups

The following sections describe how the focus group research was conducted with

specific reference to three key issues:

• balancing structured and unstructured approaches;

• venue, logistics and layout; and,

• the role of facilitation/moderation.

Structured vs. Unstructured

Bryman and Bell (2003, p. 374-5) suggest that the approach adopted should not be

intrusive and structured with a fairly small number of very general questions guiding the

session. The role of the moderator/facilitator is critical in this regard (see below). As

noted earlier, the author also found the work of Sanchez Rodrigues et al. (2010)

instructive with regard to managing the “controllable” factors in a focus group setting

(see Figure 3.7). Again one of the key factors they identify relates to the role of the

moderator/facilitator.

A number of authors (Blackhurst et al., 2005; Sanchez Rodrigues et al., 2010) suggest

that asking participants to record their opinions before the discussion starts, or even in

advance of the focus group sessions, helps to ensure that all participants’ opinions are

aired. Sanchez Rodrigues et al. (2010) described the use of “Post-It” note exercises as a

specific means of encouraging contributions from all participants.

Ultimately, the key is to ensure that a balance exists between: (i) the need to focus on

the researcher’s specific questions (i.e. the need for structure); and, (ii) keeping the

discussion open and interesting for participants so that rich insights can be generated

(the need for lack of structure). In this way, focus group research can achieve the

advantages of both extremes, whilst simultaneously mitigating the disadvantages of

each. In many ways this is analogous to the concept of semi-structured (or focussed)

interviews in relation to one-to-one discussions. It was this approach that the author

adopted in the conduct of the focus groups.

The execution of the three focus group sessions followed a similar pattern (see Table

3.4). In each session, participants were afforded the opportunity to introduce each other.

In practice some participants already knew each other – inevitable in a small country

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like Ireland. As an “ice-breaker” this process was carried out in teams of two with

participants introducing the person with whom they were paired based on a series of

pre-defined questions (relating to name, employer, role and primary responsibilities,

experiential background and academic background).

Table 3.4: Focus Group Execution

Following these self-introductions, a short introduction to the research project was

presented by the author and the purpose of the focus group component of the overall

research design clearly set out. This built on the introduction provided to participants

when they were first invited. Given the relatively large size of FG1 and FG2, they were

divided into sub-groups. For FG1 there were four sub-groups, each with three

participants; for FG2 there were three sub-groups (two groups of three and one group of

four). In these cases, care was taken to ensure that each sub-group represented a range

of sectors and personal backgrounds. In each case, the groups were asked to respond to

the facilitator’s question “What do you understand by the phrase supply chain

management?” In the case of FG1 and FG2, the sub-groups discussed the questions

without the involvement of the facilitator for about 30 minutes. For FG3 this step was

omitted and the plenary discussion took place immediately. Following the plenary

discussion, the author made a short presentation of the Four Fundamentals construct,

making reference back where possible to points raised by participants during the plenary

discussion. An overview of this presentation is shown in Table 3.5 (below). As

indicated in the table each component part of the presentation was a summary of the

relevant sub-section from sections 2.8 to 2.11 in Chapter 2. Participants were then asked

to consider and comment on the validity of the construct in general terms, as well as on

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its specific applicability in their own sectors. The final part of the focus group session

was a facilitated discussion on these issues.

Table 3.5: Overview of Focus Group Presentation of the Four Fundamentals

Venue, Logistics and Layout

Collis and Hussey (2009) note the need for a “neutral” location and the creation of a

relaxed atmosphere. Thus, location is one of the “controllable” factors identified by

Sanchez Rodrigues et al. (2010). One simple example from their experience was that by

holding sessions in various parts of the UK the traveling time of participants was

minimized. For this reason, two of the author’s focus group sessions were conducted in

Dublin and one in Cork. In each case, the venue was chosen with the convenience of

participants in mind and a u-shaped layout was used to encourage participation and

interaction.

Facilitation/Moderation

As noted in section 3.4.3, to maximize the benefits of using a focus group, identification

of a skilled moderator (or facilitator) is of critical importance. In his widely cited paper

on the use of focus groups in nursing studies, Sim (1998) highlights this issue by noting

that the skills and attributes of the moderator/facilitator and his/her role in data

collection exerts a powerful influence on the quality of the data collected in any focus

group. This individual creates an environment in which the participants feel relaxed and

encouraged to exchange views and ideas about the topic being investigated.

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Bryman and Bell (2003) identify the role of the moderator or facilitator in terms of

guiding each session without being too intrusive. They state that:

Clearly, the moderator has to straddle two positions: allowing the discussion to

flow freely and intervening to bring out especially salient issues, particularly

when group participants do not do so (p. 376).

The use of the terms “facilitator” and “moderator” signals two different but

complementary aspects of the role. The former relate to the need to, for example, lead

the discussion and generate new lines of discussion as appropriate. The latter relates to

the need to, for example, enable all views to be aired and avoid a small number of

strong personalities dominating the discussion. As Sanchez Rodrigues et al. (2010, p.

88) put it, “The nature of the facilitation is important both for stimulating discussion and

for ensuring that everyone participates.” – the italicized phrases capture the dual nature

of the role. Sim (1998) suggests that the facilitator has to generate interest in and

discussion about a particular topic, which is close to his or her professional or academic

interest, without at the same time leading the group to reinforce existing expectations or

confirm a prior hypothesis. Finally, Sanchez Rodrigues et al. (2010) suggest that the

role of the facilitator/moderator should be a dynamic one that evolves over a series of

focus group sessions. They note that:

The most important element, however, is for the research team to reflect upon

each focus group and, if necessary, adjust the facilitation approach to improve

the quality of data collected (p. 88).

Finally, they identify a range of specific skills required of a facilitator/moderator based

on the various roles carried out. These are summarized in Table 3.6 (below).

• Expert consultant in the topic discussed, having a similar level of knowledge of the subject to that of the group as a whole

• Challenger, questioning the opinions of participants, making the group rethink their assumptions and not allowing dominant members to divert the discussion onto less relevant topics

• Referee, intervening when there is conflict between participants • Discussion leader, actively facilitating and guiding the group • Effective interrogator, capable of asking probing questions

Table 3.6: Skills and Roles of Focus Group Facilitator/Moderator

Based on Sanchez Rodrigues et al. (2010); Krueger (1998); and, Morgan (1998)

A facilitator was chosen for the author’s focus groups with some care based on these

issues. Though the term “facilitator” is used in this context, the role did involve both the

facilitative and moderating elements alluded to in the previous paragraphs. The

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individual is a skilled and experienced facilitator with a good knowledge of SCM. The

latter was deemed to be important in ensuring that discussion was stimulated effectively

throughout the three sessions. However, the facilitator was briefed to avoid leading

groups to conclusions and to steer clear of expressing personal opinions – however

strongly held – about the issues under discussion. The facilitator used a flip chart

throughout the discussions to capture key points as they arose. He also furnished a

report to the author on the key issues that emerged during the sessions as he perceived

them. These two items (i.e. the flip charts and the facilitator’s reports) were key inputs

to the documenting of the three focus groups summaries (see section 5.2).

3.7.6 Analysing the Focus Group Data

The following sections describe the data analysis considerations that informed detailed

focus group design with specific reference to the concept of theory saturation and the

actual analytical process itself.

Theory Saturation

As noted by Bryman and Bell (2003, p. 373):

When the moderator is able to anticipate fairly accurately what the next group is

going to say, then there are probably enough groups already. This notion is

similar to theoretical saturation.

In other words, using multiple focus groups allows the focus group researcher to assess

the extent to which saturation has been reached. Onwuegbuzie et al. (2009) distinguish

between data saturation (i.e. when information occurs so repeatedly that the researcher

can anticipate it and whereby the collection of more data appears to have no additional

interpretive worth) and theoretical saturation (i.e. occurring when the researcher can

assume that her/his emergent theory is adequately developed to fit any future data

collected).

The importance of this concept is highlighted by Sanchez Rodrigues et al. (2010, p. 88)

in their reflection on the role of focus group research in logistics research when they

state that:

One of the main lessons from the analytical stage is the need to reflect upon any

bias in the findings. Testing for theory saturation can help to detect bias and

assess the thoroughness with which the subject has been discussed.

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They go on to note that previous applications of the method in the field of logistics

appear not have measured the degree of theory saturation, with an exception being

Cullen and Webster (2007). However, their paper does not provide information on how

this measurement was carried out; it merely states that “four groups were planned for

this study, but theoretical saturation was reached after three, and the fourth was not

required” (Cullen and Webster, 2007, p. 211).

A number of authors have suggested that three to six different focus groups are adequate

to reach data saturation and/or theoretical saturation (see, for example: Onwuegbuzie

and Collins, 2007; Krueger, 1998; and, Morgan, 1998). As intimated in section 3.7.2

(above), in the author’s research three focus groups were conducted as it was felt that

data saturation had been reached at this point. The facilitator and the author were able to

anticipate quite accurately at this point how participants were likely to respond to

particular prompts. For example (and as explained in detail in section 5.4.1) many of the

key discussion points that emerged during FG3 were very similar to issues that emerged

during the two earlier sessions. As with Cullen and Webster (2007), four groups had

been planned initially but the fourth was not deemed to be required.

Analytical Process

The focus group session will work best if it is tape-recorded and subsequently

transcribed (Bryman and Bell, 2003, p. 371). Robson (2003) also generally recommends

audio but notes too that “there are some situations where this may affect the working of

the group (perhaps because of the sensitivity of the topic, or the characteristics and

expectations of group members)” (p. 288). The three focus group sessions were

recorded. The author’s experience suggests that any initial participant misgivings in

relation to this largely disappear once the discussion is underway.

As noted by Sim (1998), focus groups aim to explore collective (i.e. rather than

individual) experience and perspectives. However, Kitzinger (1994) has observed that

reports of focus group research frequently do not take into account interaction within

the group. This is somewhat surprising, given that it is precisely the operation of social

interaction that would seem to distinguish the focus group method from a one-to-one

interview. Yet, as noted by Bryman and Bell (2003, p. 378), very few accounts of focus

group research “cite or draw inferences from the patterns of interaction within the

group”. In other words, far more attention has been devoted to how groups are

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organized and conducted than to issues of analysis. As noted in their paper on enhancing

the methodological rigour of focus group research, Kidd and Parshall (2000, p. 293)

state that:

Although exploitation of group dynamics is touted as a virtue of focus groups,

there is very little guidance in the literature with respect to how differences

between group and individual discourse impact the analysis and interpretation of

focus group data.

In their article, the authors describe analytical challenges inherent in the interpretation of

focus group data and suggest a number of approaches for enhancing the reliability and

validity of focus group findings. For this and other reasons, Robson (2002, p. 288)

suggests that “much of the literature of focus groups is methodologically naïve”. In

other words, the description of much previous focus group research appears to be based

on fact finding without specific reference to appropriate theoretical bases (i.e. “naïve

empiricism”).

The author and the facilitator were mindful of these issues in the conduct of the focus

groups. Furthermore, and in a similar manner to the analysis of the focussed interviews

in Chapter 4, the focus group analytical process was guided by the key criteria for

judging qualitative research recommended by Lincoln and Guba (1985). This is

discussed in more detail in section 5.4.

3.8 Phase III: Survey Questionnaire

3.8.1 Background

As Oppenheim (1992, p. 7) stated:

Too often, surveys are carried out on the basis of insufficient design and

planning or on the basis of no design at all. ‘Fact gathering’ can be an exciting

and tempting activity to which a questionnaire opens a quick and seemingly easy

avenue; the weaknesses in the design are frequently not recognised until the

results have to be interpreted – if then!

This highlights the need for robust approaches to the design of questionnaires. Several

authors have proposed models that indicate the main stages in the process. For example,

Robson (2002) suggests that there are five main stages in this process: initial planning

and design; questionnaire design; questionnaire pre-testing; final design and planning;

and, data collection, presentation and analysis. Collis and Hussey (2009) propose an

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alternative process comprising seven stages; their approach focuses more on the design

and testing of the actual questionnaire. The stages are: develop and justify the questions;

determine the order of presentation; write the accompanying letter; test questionnaire

with a small sample; choose distribution method; plan strategy for dealing with non-

responses; and, conduct tests for validity and reliability. The approach adopted by the

author and the structure of this section are based on the proposed processes of Robson

(2002) and Collis and Hussey (2009) and is shown in Figure 3.13 (below).

Figure 3.13: Main Stages in Carrying Out a Questionnaire Survey and Structure of Section 3.8

Based on Robson (2002) and Collis and Hussey (2009)

Section 3.8.2 deals with initial design and planning, with a specific focus on population

definition, sampling frame identification and sampling design. The following sections

explain the main elements of the draft questionnaire design process: an overview of the

design process (3.8.3); identification of data requirements (3.8.4); and, determination of

survey question wording (3.8.5). Some data analysis considerations are then set out in

section 3.8.6 before the process of draft questionnaire pre-testing is explained (section

3.8.7). The final design and planning is described in section 3.8.8, with specific

reference to distribution method, the structure of the accompanying letter and the

author’s non-response strategy.

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3.8.2 Initial Design and Planning

Much of survey design and initial planning is typically dealt with during the overall

research design for a project. For example, the role that the survey plays in the context

of the wider research methodology is clearly set out at this stage (see section 3.5). Part

of this involves ensuring that survey execution is clearly linked to the research

questions, and thus back to the literature review. The importance of this is set out

succinctly by Robson (2002):

The importance of a theoretical framework for surveys seeking to move beyond

description to explanation can not be over-estimated. Whether expressed in

terms of a set of possible mechanisms and the contexts in which they operate, or

in other terms, they prevent the survey questionnaire degenerating into a fishing

trip where questions are added simply because ‘it seemed a good idea at the

time’ (p. 240).

This point is particularly important in SCM research generally, and in the current

research specifically, given the claim of Storey et al. (2006) that the “precepts of SCM

as portrayed in the literature are a mix of description, prescription and the identification

of trends” and that the literature “tends to move rather imperceptibly” (p. 757) between

these elements.

Other key issues involved in the planning stage include defining the total population to

be studied, identifying an appropriate sampling frame and determining the sampling

design to be adopted. The following sections explain the approach adopted by the

author in relation to these issues.

Population Definition

One possible approach to this is to define the population as all firms in Ireland. The

justification for this could be that all firms – irrespective of sector or size – are part of a

wider supply chain. A broad definition of SCM – such as the Four Fundamentals

construct – is in line with this approach. Table 3.7 (below) shows the Companies

Registrations Office (CRO) breakdown of companies in Ireland at the end of 2009 and

indicates that there are just over 180,000 registered companies. Business demographic

data from the Irish Central Statistical Office (CSO) estimates the total number of firms

at over 203,083 (CSO, 2011). The higher number reflects the fact that the CSO data

includes sole traders, partnerships and other legal forms that are not required to register

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with the CRO. In any case, adopting this approach involves defining the population as

being somewhere between 180,000 and just over 203,000 firms.

Table 3.7: Register of Companies at the End of 2009 Source: CRO (2010)

However, there may be some justification for confining the survey to particular sectors

or for excluding certain sectors on the basis of their limited exposure to SCM thinking

and/or its limited relevance in these sectors. The former approach has been widely

adopted in previous empirical studies, while the latter involves justifying the exclusion

of firms in specific sectoral categories using well established industry classifications

(e.g. NACE).

Part of the author’s literature review as presented in Chapter 2 involved an analysis of

earlier empirical studies directly relevant to the current research. In total 90 previous

empirical SCM/logistics studies were reviewed in some detail (see Appendix 7). The

data in Figure 3.14 (below) show the sectoral foci of these studies. Many papers (listed

under “various”) incorporated a wide range of sectors. A further group of papers have a

focus on manufacturing organisations in general (“various manufacturing”) which is

perhaps not surprising given that much SCM theory and practice has its origins in

manufacturing. A number of studies illustrate this breadth (for example: Ketikidis et al.

(2008) focused on “manufacturing and trading”; Toyli et al. (2008) on “manufacturing,

wholesale and retail”; Heide et al. (2008) on “trade and manufacturing”). However,

most papers neither fully explain what precisely is encompassed by these broad sectoral

classifications nor do they provide any meaningful justification for their selection. For

example, the specific focus of Ketikidis et al. (2008) is the use of information systems

in the supply chain and their research involved emailing a questionnaire to 300 firms in

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various South East European countries. The only justification provided for their

population identification is that:

Manufacturing and trading enterprises were the target groups because they tend to

adopt such information systems and it was envisaged that interesting results could

be obtained (p. 595).

For the current research, a more meaningful justification is desirable if the population to

be studied is to be narrowed by focussing on particular sectors.

Figure 3.14: Empirical Studies by Sector

Some of these earlier papers had quite a narrow focus (“specified sectors”) exploring

particular industry sectors in some detail (for example: Brun et al. (2008) examined the

luxury fashion industry; Davila and Wouters (2007) studied disk drive manufacturing;

Korneliussen and Gronhaug (2003) focussed on the salmon farming industry). A small

number of studies were specifically concerned with the retail and 3PL links in the

supply chain. Identification of an appropriate sampling frame is – by definition – easier

when specific sectors are the focus of research. However, the author’s research

questions are broad in scope and do not lend themselves to a relatively narrow focus on

specific sectors. As noted earlier, a possible alternative approach involves excluding

certain sectors on the basis of their limited exposure to SCM thinking and/or its limited

relevance in such sectors.

NACE (Nomenclature générale des Activités économiques dans les Communautés

Européennes) is the EU statistical classification of economic activities. The current

version (NACE Rev. 2) was adopted by the Irish Central Statistics Office (CSO) as its

standard in 2008. Each top-level category (21 in total, labeled “A” to “U”) is

disaggregated into further detail as shown in Table 3.8.

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Table 3.8: NACE Rev. 2 Industry Category Disaggregation

Each category was considered for possible inclusion in the population to be studied on a

case by case basis. The first two categories provide an illustration of how this was

approached. NACE A (agriculture, forestry and fishing) is defined as “the exploitation

of vegetal and animal natural resources” and continues to be an important sector in the

Irish economy. It largely comprises farms of which there were almost 130,000 units

greater than one hectare in size according to the 2007 CSO Farm Structure Survey.

Such units are of limited interest in the current research and this category has, therefore,

been excluded from the study. It is important to emphasise that NACE category A does

not include processing, manufacturing and distribution activities related to the food

sector, all of which are classified under other appropriate NACE codes (e.g. NACE code

1011 in category C (“Manufacturing”) refers specifically to “processing and preserving

of meat”). Such activities will be included in the survey. Furthermore, exclusion of

NACE category A from surveys of this kind is in line with the EU/OECD business

demography approach which suggests that such firms are excluded “mainly due to the

current coverage of statistical business registers in most OECD and EU countries”.

Thus, even if this category were included identifying an appropriate sampling frame

would be problematic. However, it is recommended that a study of the adoption of SCM

practices in this sector be undertaken as a separate exercise. On the other hand, there

does not appear to be any valid reason for exclusion of NACE B (mining and quarrying)

and it is, therefore, included in the survey. CSO data indicate that there are 385 firms in

this category. A similar process was adopted in relation to all NACE categories. Table

3.9 below shows the 21 NACE top-level categories and indicates those that have been

included and excluded from the survey.

Level 2: 88 divisions identified by two-digit numerical codes (01 to 99);

Level 3: 272 groups identified by three-digit numerical codes (01.1 to 99.0);

Level 4: 615 classes identified by four-digit numerical codes (01.11 to 99.00).

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Code Category Included, partially

included, excluded

A AGRICULTURE, FORESTRY AND FISHING

Excluded

B MINING AND QUARRYING Included C MANUFACTURING Included D ELECTRICITY, GAS, STEAM AND AIR

CONDITIONING SUPPLY Included

E WATER SUPPLY; SEWERAGE, WASTE MANAGEMENT AND REMEDIATION ACTIVITIES

Included

F CONSTRUCTION Excluded G WHOLESALE AND RETAIL TRADE;

REPAIR OF MOTOR VEHICLES AND MOTORCYCLES

Included

H TRANSPORTATION AND STORAGE

Included

I ACCOMMODATION AND FOOD SERVICE ACTIVITIES

Excluded

J INFORMATION AND COMMUNICATION

Included

K FINANCIAL AND INSURANCE ACTIVITIES

Excluded

L REAL ESTATE ACTIVITIES Excluded M PROFESSIONAL, SCIENTIFIC AND

TECHNICAL ACTIVITIES

Excluded

N ADMINISTRATIVE AND SUPPORT SERVICE ACTIVITIES

Excluded

O PUBLIC ADMINISTRATION AND DEFENCE; COMPULSORY SOCIAL

SECURITY

Excluded

P EDUCATION Excluded Q HUMAN HEALTH AND SOCIAL WORK

ACTIVITIES Partially included

R ARTS, ENTERTAINMENT AND RECREATION

Excluded

S OTHER SERVICE ACTIVITIES Included T ACTIVITIES OF HOUSEHOLDS AS

EMPLOYERS; U0NDIFFERENTIATED GOODS- AND SERVICES-

PRODUCING ACTIVITIES OF HOUSEHOLDS FOR OWN USE

Excluded

U ACTIVITIES OF EXTRATERRITORIAL ORGANISATIONS AND BODIES

Excluded

Table 3.9: NACE Top-Level Categories Included in and Excluded from the Survey

Analysis of Table 3.9 indicates that eight NACE level one categories have been

proposed for inclusion, 12 for exclusion and one (“human heath and social work

activities”) for partial inclusion. The great majority of entities in this category are not of

interest, particularly those related to specialised social work activities, and were

excluded. However, many health care activities are of strong interest. For example, the

Health Services Executive (HSE) in Ireland is a major buyer of a wide range of medical

and non-medical products and services and employs a large number of purchasing and

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materials management professionals. More specifically, there are a small number of

organisations under one specific NACE level 4 class – i.e. 8610 (“hospital activities”) –

part of which is of interest. Care was taken, therefore, not to exclude HSE and private

sector purchasing and materials management activities. The tiny number of

organisations of interest in this area (negligible in the context of the approximately

200,000 firms that exist in Ireland) does not materially impact on sampling

considerations.

Table 3.10 shows the included categories and the number of firms in each based on

CSO business demographic data. The approach adopted in terms of inclusion and

exclusion of NACE categories is in line with that of the EU and the OECD as set out in

the Eurostat - OECD Manual on Business Demography Statistics. The economic

activities for which business demography indicators are produced are NACE Rev 2

categories B to N (i.e. excluding categories A and P to S). The author has retained

category S as it provides a potentially useful residual category for service firms whose

primary activities do not readily lend themselves to classification using one of the other

labels. However, it is very small and represents just 0.6% of the total number of targeted

firms. The Eurostat - OECD Manual on Business Demography Statistics notes that

the inclusion of categories B to N and the exclusion of categories A and P to S results

in:

activities relating to production, construction, distributive trades and services are

covered, but agriculture, public administration, non-market activities of

households, and extra-territorial agencies are not. This is mainly due to the current

coverage of statistical business registers in most OECD and EU countries.

As noted previously in the specific context of exclusion of the “agriculture, forestry and

fishing” category from the current study, the current limited coverage of these

categories would make the identification of an appropriate sampling frame problematic.

147

Sector (NACE level 1 category code) No. of firms

% of total

Mining and quarrying (B) 385 0.5% Manufacturing (C) 12886 16.4% Electricity, gas, steam and air conditioning supply (D) 209 0.3% Water supply; sewerage, waste management and remediation activities (E) 785 1.0% Wholesale and retail trade; repair of motor vehicles and motorcycles (G) 43205 54.9% Transportation and storage (H) 11069 14.1% Information and communication (J) 9682 12.3% Other service activities (S) 450 0.6% Human health and social work activities (Q) n/a Total 78671 100.0%

Table 3.10: Number of Firms in the Targeted NACE Top-Level Categories Source: CSO (2011)

As per the data in Table 3.10, the total number of firms in the targeted categories is

76,781 firms. This represents 38.7% of the total number of firms in Ireland (203,083) as

per CSO business demographic data. However, the great majority of these firms are

micro-enterprises. In terms of number of employees, micro-enterprises are defined by

the EU as having fewer than 10 personnel32. The CSO business demography data

indicates that the number of firms with 10 employees or more is as shown in Table 3.11

below. Exclusion of micro-enterprises enterprises is justified on the basis that the great

majority of such firms are unlikely to have had exposure to SCM thinking. However,

small and medium-sized enterprises (SMEs), as well as large firms, are included in the

survey thus allowing comparisons to be made between the SCM approaches adopted by

firms of different sizes.

Sector (NACE level 1 category code) No. of firms

% of total

Mining and quarrying (B) 0 0.0% Manufacturing (C) 2775 24.2% Electricity, gas, steam and air conditioning supply (D) 0 0.0% Water supply; sewerage, waste management and remediation activities (E) 150 1.3% Wholesale and retail trade; repair of motor vehicles and motorcycles (G) 6610 57.8% Transportation and storage (H) 1029 9.0% Information and communication (J) 831 7.3% Other service activities (S) 50 0.4% Human health and social work activities (Q) n/a Total 11445 100.0%

Table 3.11: Number of Firms in the Population by NACE Category Source: CSO (2011)

32 In addition to the staff headcount ceilings, the size an enterprise is based on either the turnover ceiling or the balance sheet ceiling, but not necessarily both.

148

Thus, the total number of firms in the population is 11,445. This represents 14.5% of the

total number of firms in the targeted NACE categories (i.e. the great majority of firms in

these categories – 85.5% - are micro-enterprises) and 5.6% of the total number of firms

in Ireland. The data in Table 3.11 and Figure 3.15 (below) indicate that NACE category

G (“wholesale and retail trade”) has easily the largest number of firms and represents

over half of the population. Categories C (“manufacturing”), H (“transportation and

storage”) and J (“information and communications”) represent the bulk of the rest of the

population (40.5% collectively). The remaining categories represent less than 2% of the

population. It is interesting to note that the three categories with the largest number of

firms in the population (i.e. “wholesale and retail trade”, “manufacturing” and

“transport and storage”) relate directly to the supply chain links of “sell”, “make” and

“move & store” respectively.

24.2%

1.3%

57.8%

9.0%7.3% 0.4%

C

E

G

H

J

S

Figure 3.15: Number of Firms in the Population by NACE Category Source: CSO (2011)

It is also useful to further break the population down into level 2 of the NACE

categories, at least for the two sectors (i.e. G and C) that represent the great majority of

the firms to be studied.

NACE category G (“wholesale and retail trade”) is broken down into three level 2

divisions (“motor trade”, “wholesale trade” and “retail trade”). The breakdown of

NACE category G firms in the population is shown in Table 3.12 and in Figure 3.16.

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Sector (NACE level 2 division code) No. of firms % of total

Motor trades (45) 804 12.2% Wholesale trade (46) 2123 32.1% Retail trade (47) 3683 55.7% Total 6610 100.0%

Table 3.12: NACE Category G - Breakdown of Population by Level 2 NACE Divisions

Source: CSO (2011)

12.2%

32.1%55.7%

Motor trades (45)

Wholesale trade (46)

Retail trade (47)

Figure 3.16: NACE Category G - Breakdown of Population by Level 2 NACE Divisions

Source: CSO (2011)

As indicated earlier, “manufacturing” is the category that is most highly disaggregated

in NACE. It is decomposed into 24 level 2 divisions each of which represents a specific

manufacturing sector (e.g. “manufacture of leather and related products”). The

breakdown of NACE category C firms in the population is shown in Table 3.13 and in

Figure 3.17.

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Sector (NACE level 2 division code) No. of firms

% of total

Food products, beverages and tobacco (10 to 12) 456 16.4% Textiles and wearing apparel (13,14) 109 3.9% Leather and related products (15) 0 0.0% Wood and wood products, except furniture (16) 158 5.7% Paper and paper products; printing and reproduction of recorded media (17,18) 246 8.9% Chemicals and pharmaceuticals (20,21) 149 5.4% Rubber and plastic products (22) 183 6.6% Other non-metallic mineral products (23) 221 8.0% Basic metals and fabricated metal products (24,25) 453 16.3% Computer, electronic, optical and electrical equipment (26,27) 169 6.1% Machinery and equipment n.e.c. (28) 207 7.4% Transport equipment (29,30) 58 2.1% Furniture and other manufacturing (31,32) 315 11.3% Repair and installation of machinery and equipment (33) 51 1.8% Coke and refined petroleum products (19) 0 0.0% Total 2775 100.0%

Table 3.13: NACE Category C - Breakdown of Population by Level 2 NACE Divisions Source: CSO (2011)

16.4%3.9%

0.0%

5.7%

8.9%

5.4%6.6%8.0%16.3%

6.1%

7.4%

2.1% 11.3%

1.8% 0.0%

NACE 10 to 12 NACE 13,14 NACE 15 NACE 16

NACE 17,18 NACE 20,21 NACE 22 NACE 23

NACE 24,25 NACE 26,27 NACE 28 NACE 29,30

NACE 31,32 NACE 33 NACE 19

Figure 3.17: NACE Category C - Breakdown of Population by Level 2 NACE Divisions Source: CSO (2011)

Sampling frame identification

A sampling frame is “a list of all of those eligible to be included in the sample”

(Easterby-Smith et al., 2008, p. 332). In many cases, it may not be possible to generate a

complete and accurate database of the total population. The extent to which the

sampling frame is representative of the total population is, therefore, of great

importance. As stated by Robson (2002):

If a reasonably adequate sampling frame can be obtained, this puts you in the

position of being able to draw a (reasonably) adequate random sample, i.e. a

sample where all members of the population of interest have an equal chance of

being selected for the sample (p. 241).

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In the context of the author’s research, there is no single reliable database that provides

contact details of all firms in the population. Some researchers have used commercial

databases such as KOMPASS and AMADEUS. Kinsella (2009) adopted this approach

for his study of the age distribution of firms registered in Ireland across all NACE

categories. This approach is satisfactory where the research involves analysis of high

level data based on secondary sources. However, it does not provide the contact

information required for an appropriate sample to be readily identified for a

questionnaire survey.

One possible way of addressing this challenge is to use the database of the National

Institute for Transport and Logistics (NITL). This database has several thousand email

contacts and has been used previously for empirical surveys of various kinds. It started

life as a commercial database (KOMPASS) with new contacts having been added over a

ten year period. It is also regularly refined to ensure that contact details are kept as up to

date as possible. However, for this database to be usable for the current research a

sample needs to be identified that is genuinely representative of the total population

under consideration. To this end, the author has coded all entries in the database in line

with the NACE codes. In this way, a stratified sample can be drawn from the wider

database that reflects the breakdown of the population.

Sampling design

Once the sampling frame has been identified, the sampling technique to be adopted then

needs to be chosen. Saunders et al. (2009) provide a useful overview of possible

sampling techniques, based on both probability and non-probability sampling (p. 213).

The former (i.e. probability or representative sampling) involves selecting a sample

where the probability of each case selected from the total population is known and is

usually equal; the latter (i.e. non-probability or judgemental sampling) does not and

therefore makes it difficult to make statistical inferences about the characteristics of the

population as a whole. These are key issues in the process of sampling design.

As pointed out by Easterby-Smith et al. (2008), the essence of sampling design is about

“combining precision and representativeness to achieve a credible sample” (p. 214-5).

The former depends on the size of the sample with small samples always being less

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precise than larger ones; the latter is about ensuring that the sample is genuinely

representative of the total population.

As noted earlier, the chosen sampling technique is stratified random sampling. This is

defined by Saunders et al. (2009) as a:

Probability sampling procedure in which the population is divided into two or

more relevant strata and a random sample is drawn from each strata (p. 601).

They suggest that the procedure involves a number of stages.

Firstly, the stratification variable needs to be chosen. This is based on the NACE codes

as discussed previously. The strata used were the NACE level 1 categories C, E, G, H, J

and S (see Figure 6.3 above). The categories with the largest number of firms – G and C

– were further decomposed into their level 2 NACE divisions (as shown in Figures 3.16

and 3.17 respectively) thus providing a rational basis for further stratifying the sampling

frame. The total number of strata is 2133 and the proportion of the total population in

each stratum is as shown in Table 3.14 below.

Secondly, the sampling frame (i.e. the NITL database) is divided into these discrete

strata. A random sample is then selected ensuring that each of the strata is represented

proportionally. Given that the response rates in the majority of the previous empirical

studies reviewed by the author (see Appendix 7) were less than 20%, and that rates

between 10 and 20% were most common, the sample size was set at 1,000 in an effort

to ensure that a sufficient number of usable responses was received for analysis

purposes. In conjunction with the author’s stratification process, this was designed to

achieve the “credible sample” to which Easterby-Smith et al. (2008) referred.

33 20 are included in Table 3.14; “Healthcare” – part of NACE category Q – is the 21st.

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Level One Category Level Two Division No. of Firms % of Total

NACE C NACE 10 to 12 455 4.0% NACE 13,14 109 1.0% NACE 16 158 1.4% NACE 17,18 245 2.1% NACE 20,21 149 1.3% NACE 22 182 1.6% NACE 23 220 1.9% NACE 24,25 452 4.0% NACE 26,27 168 1.5% NACE 28 206 1.8% NACE 29,30 58 0.5% NACE 31,32 314 2.7% NACE 33 51 0.4%

NACE E n/a 150 1.3% NACE G NACE 45 804 7.0%

NACE 46 2123 18.6% NACE 47 3683 32.2%

NACE H n/a 1029 9.0% NACE J n/a 831 7.3% NACE S n/a 50 0.4%

Table 3.14: Sampling Strata Based on NACE Categories and Divisions

3.8.3 Questionnaire Design Process

This section sets out the process used in identifying survey data requirements and in

developing the actual questions to be posed in the survey instrument.

Data requirements and questions are informed by the literature review and overall

project research questions (RQs) set out in Chapter 2. As noted by Robson (2002):

It is worth stressing that the questions for the questionnaire are not produced by

you sitting down and trying to think of some interesting things to ask; or even by

getting a group together to do this. The survey questions should be designed to

help achieve the goals of the research and, in particular, to answer the research

questions (p. 241).

In line with this advice, the process of designing the questions for the questionnaire was

carried out in a logical and systematic manner. Specifically, the three-stage process

shown in Figure 3.18 was adopted.

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Figure 3.18: Design Process for Survey Questions

The first part of the process (“Formulate Overall Project RQs”) is part of the “Initial

Planning and Design” stage of the overall approach. As noted previously, much of this

stage is typically dealt with during the overall research design for a project. The key

issue from the perspective of questionnaire design involves ensuring that the questions

asked are clearly linked back to the overall project research questions (RQs), and thus

back to the literature review. In other words, and as shown in Figure 3.18, the RQs are a

key output of this stage of the process and a key input into the next stage (i.e. “Identify

Variables/Data Required”).

This second stage essentially involved decomposing the four overall RQs into more

detail in a logical and systematic manner – a process of stepwise decomposition. This

process is widely used in many disciplines, perhaps most notably in software

engineering (see, for example, Sajeev and Inchaiwong, 2002). It involves breaking

down (i.e. decomposing) a process (or an objective or a question) into its constituent

elements in a step-by-step (i.e. stepwise) manner until the detail of the process (or

objective or question) is understood with sufficient clarity. It is analogous to the

systematic approach proposed by Saunders et al. (2009) to ensuring that all essential

data are collected. Their approach involves identifying the variables about which data

needs to be collected to answer all investigative questions. In this case, stepwise

decomposition of the overall RQs – in particular of RQ2 given that this question is the

specific focus of the questionnaire – was carried out using the Four Fundamentals

construct. This stage resulted in 43 detailed questions being formulated (labelled Q1A

to Q14C). These questions identify the variables that the questionnaire survey is seeking

to collect data in relation to. In essence, they provide the author with a list of survey

data requirements.

The next step involves translating these data requirements into an actual questionnaire

(i.e. “Design Survey Questions”). In relation to designing questions for surveys,

Easterby-Smith et al. (2008) identify five useful principles:

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1. Each question should express only one idea;

2. Avoid jargon and colloquialisms;

3. Use simple expressions;

4. Avoid the use of negatives; and,

5. Avoid leading questions.

Other scholars provide similar checklists in relation to the avoidance of problems in

wording questions (see, for example: Robson (2002), p. 245-6; Saunders et al. (2009), p.

384). This stage of the process needs to be cognisant of issues such as these. This

process is described in the following sections. Its systematic nature helps to ensure that:

(i) RQ2 is answered as comprehensively as possible; (ii) data is collected that will

contribute to the answering of the other RQs; and, (iii) the necessary data is collected to

deductively test the refined Four Fundamentals construct.

3.8.4 Identification of Data Requirements

In line with the process set out in Figure 3.18 and described in section 3.8.3, it is

necessary to identify project and questionnaire data requirements through a process of

stepwise decomposition based on the Four Fundamentals construct. Throughout the

process, data requirements were identified by developing a set of detailed questions.

The majority of these questions relate directly to RQ2 (i.e. “What is the level of

adoption of SCM in practice?”) and to the deductive testing of the Four Fundamentals

as a definitional construct. However, some of the early questions relate to RQ1 (i.e.

“What is the level of understanding of SCM in practice?”), thus building on the

focussed interview analysis in relation to practitioner perspectives on logistics and SCM

(see Chapter 4) and the focus group work aimed at refining the Four Fundamentals

construct (see Chapter 5). Similarly, some of the later questions relate to RQ3 (“What

are the critical success factors and/or inhibitors to success in putting SCM theory into

practice?”) and, more especially, to RQ4 (“What practical measures could be put into

place at policy/supply chain/firm level to improve the level of effective SCM

adoption?”). It is important to note that these questions are included to ensure that the

opinions of respondents are solicited about the issues in question, thus complementing

the data collected using more qualitative approaches (as set out elsewhere in this thesis).

The development of one specific (and randomly chosen) question (Q7A – see Table

3.15 below) serves to illustrate the logic adopted in this process. As noted in Chapter 2,

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the concept of integration has long been regarded as the central tenet of SCM and thus

provides the basis of that component of the author’s definitional construct

(Fundamental Two) that attempts to capture the essence of SCM philosophy. As also

noted in Chapter 2, this concept can be considered at many levels and, in particular, in

terms of how it relates to both the internal and external supply chain. In the context of

the former and with reference to marketing/logistics interfaces specifically, the work of

Ellinger (2000) – as cited in section 2.9.2 – recognises that despite its well documented

advantages the extent of internal integration in practice is limited. The work of Sweeney

et al. (2007) also suggests that the perceived level of integration of internal SCM

activities is relatively low. These and other arguments posited by the author in the

literature review described in Chapter 2 lead directly to the question:

Q7A: To what extent are internal supply chain activities integrated?

A similar process of stepwise decomposition was carried out by the author and this is

described in detail in Appendix 10. Table 3.15 shows the 43 detailed questions that

were developed through this process as they relate to: (i) background and context; (ii)

each of the components of the Four Fundamentals construct; and, (iii) implications (at

firm, supply chain and policy levels).

3.8.5 Determination of Survey Question Wording

At this stage of the process the precise wording of the actual questions to be asked of

respondents was determined, along with the order of presentation. As with section 3.8.4,

one specific (and randomly chosen) example serves to illustrate the process adopted by

the author.

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Table 3.15: Survey Data Requirements in the Form of Detailed Questions

The only question in the draft questionnaire that related specifically to internal

integration is based on Q7A in Table 3.15 (i.e. “To what extent are internal supply chain

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activities integrated?”). This question is operationalised using a five-point Likert scale

as follows:

How would you describe the extent to which your company’s internal supply chain

activities are integrated? □ Fully integrated □ Highly integrated □ Somewhat integrated □ Poorly integrated □ Not at all integrated

Notwithstanding the inevitable element of subjectivity involved in answering a question

of this nature, the Likert scale adopted uses the same approach as an earlier empirical

study of SCM practice carried out in Ireland (NITL, 2005). Thus, as well as providing a

range of options to respondents, this enables some comparisons to be made in relation to

how practice in this area may have changed in recent years.

Determination of the structure and wording of all questions followed a similar process.

The complete draft questionnaire, therefore, largely followed the logical flow set out in

Table 3.15 (above) and used a mix of open and closed questions. In total, it comprised

31 questions divided into six sections, as well as a section on respondent demographic

and control information.

The final section of the questionnaire asks for demographic and control information

about respondents and their companies. These questions enable the author to determine

whether respondent and/or company characteristics affect respondents’ attitudes to the

variables under consideration. Particular care was taken to ensure that data was captured

so that Q1F in Table 3.15 – “Are there differences of emphasis based on (i)

functional/professional background, (ii) business sector, and (iii) geographical base?” –

could be answered.

Following an optional question that asks for company name, respondents are then asked

for information about which sector their companies operate in. This is a closed question

and adopts the NACE classification system. The use of this system facilitates

comparisons between the author’s research and that of other EU researchers. The NACE

level 1 categories of all sectors in the population are options, with level 2 divisions

provided for respondents in categories C and G in line with the 21 strata used in the

sampling design.

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The next three questions ask for information about company size. Based on the EU

definitions, enterprises qualify as micro, small and medium-sized enterprises (SMEs) if

they fulfil the criteria which are summarized in Table 3.16 below. In addition to the

staff headcount ceilings, the size of an enterprise is based on either the turnover ceiling

or the balance sheet ceiling, but not necessarily both.

Enterprise category Headcount Turnover or Balance sheet total

medium-sized < 250 ≤ € 50 million ≤ € 43 million

small < 50 ≤ € 10 million ≤ € 10 million

micro < 10 ≤ € 2 million ≤ € 2 million

Table 3.16: EU Definition of Firm Size

The next three questions asks about company ownership (e.g. Irish, local operation of

multinational company, other). Respondents were also asked about their professional

backgrounds (i.e. end-to-end supply chain management, purchasing,

production/operations management, transport management, warehouse management,

customer service, other). These options are based on the “buy-make-move-store-sell”

logic introduced earlier.

3.8.6 Data Analysis Considerations

Before the first draft of the questionnaire is pre-tested, as noted by Collis and Hussey

(2009, p. 207) “it is important to consider at this stage how you will analyse your

research data”. The following sections provide an overview of how the author intends to

proceed in this regard for the data collected using each section of the questionnaire.

Questionnaire Section 1: Background

This part of the questionnaire relates mainly to RQ1 (i.e. “What is the level of

understanding of SCM in practice?”). Analysis of these responses will, therefore,

mainly use descriptive statistics and comparison with the findings from the focussed

interviews (Chapter 4) and focus groups (Chapter 5). Content analysis will be used to

analyse responses to the open questions. In relation to respondents’ opinions about the

relationship between SCM and logistics, the data will be tested for significant

differences between respondents based on: (i) sector; (ii) firm size; (iii) firm ownership;

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and, (iv) respondent background. This will facilitate the creation of the profile based on

the taxonomy of Larson and Halldorsson (2004). Similarly, responses to the other

questions in this section that use Likert scales can also be tested for differences based on

respondent demographics.

Questionnaire Section 2: SCM Objectives (Fundamental One)

The majority of the data gathered using this section will be tested for significant


and, (iv) respondent background. The one exception will be in relation to the

importance of customer service in the markets served. In this case, it is the sector in

which the firm is based that is likely to be the key determinant34.

Questionnaire Section 3: Supply Chain Integration (Fundamental Two)

Data collected using all five questions in this section will be tested for significant


and, (iv) respondent background. The extent to which external integration (i.e.

integration with customers and suppliers) is predicated upon internal integration is also

of interest. Correlation analysis will be used to assess the strength of these relationships.

Correlation between the importance attached by respondents to different types of

integration and the corresponding levels of integration (i.e. internal and external) can

also be tested.

Questionnaire Section 4: Supply Chain Flow Management (Fundamental Three)

As with section 3, data collected using all four questions in this section will be tested for

significant differences between respondents based on: (i) sector; (ii) firm size; (iii) firm

ownership; and, (iv) respondent background. It was argued in Chapter 2 that the

effective management of material and money flows is predicated upon the effective

management of the related information flows. This can be tested using correlation

analysis.

Questionnaire Section 5: Supply Chain Relationships (Fundamental Four)

As with sections 3 and 4, data collected using all three questions in this section will be

tested for significant differences between respondents based on: (i) sector; (ii) firm size;

34 Given the addition of the “environmental sustainability” option in the question on SCM objectives as a direct result of the focus group research described in Chapter 5, particular attention will be paid to this data.

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(iii) firm ownership; and, (iv) respondent background. In addition, the data can be

checked for correlation between, on the one hand, “the nature and extent of

relationships” (internally and with customer and supplier companies) and, on the other

hand, “the extent to which supply chain activities are integrated” (internally and with

customers and suppliers).

Questionnaire Section 5: Supply Chain Improvement

This part of the questionnaire relates mainly to RQ4 (i.e. “What practical measures

could be implemented at policy/supply chain/firm level to improve the level of effective

SCM adoption?”). Analysis of these responses will, therefore, mainly use descriptive

statistics and comparison with the qualitative research described elsewhere in this

thesis. Data collected using the “yes/no/don’t know” questions in this section can also

be easily tested for significant differences between respondents based on one of more

of: (i) sector; (ii) firm size; (iii) firm ownership; and, (iv) respondent background.

Cross-Sectional Analysis

This section extends the focus to relationships between variables across different

sections of the questionnaire – cross-sectional analysis. Three issues are of particular

interest in this context:

1. the relationship between different types of SCI and the manner in which

information flows are managed (given the concept that integration is predicated

upon effective information management);

2. the relationship between different types of SCI and the use of ICT tools (given

the role often attributed to ICT as an enabler of SCI); and,

3. relationships between different types of SCI and the strength of different types

of customer/supplier relationships.

Where significance testing is used, dependencies are considered to be: highly significant

(VS) where p <= 1%; significant (S) where 1% < p <= 5%; slightly significant (LS)

where 5% < p <= 10%; and, not significant (NS) where p > 10%. Factor maps of the

cross tabulations – based on the approach known as correspondence analysis – will also

be used to illustrate the relationships between variables. In particular, this allows the

factors that contribute most strongly to statistically significant relationships between

demographic and other variables to be identified. As opposed to traditional hypothesis

testing designed to verify a priori hypotheses about relationships between variables, this

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form of exploratory data analysis is used to identify systematic relationships between

variables when there are no (or incomplete) a priori expectations as to the nature of such

relationships.

A factor map is a diagram, representing the distribution of two, or more, closed

variables according to two factors. SphinxSurveyTM (the author’s chosen survey tool –

see section 3.8.8) automatically selects the two strongest factors (those explaining the

greatest percentage of the variance) to be displayed on the map. The variance explained

by each factor is given in brackets by the axis title. The factor map offers a visual way

of presenting findings from cross tabulations. All interpretations could equally be made

from observing the cell values in the table. However, with a factor map, the key

relationships between variables can be quickly and intuitively identified. The proximity

of items reflects the degree to which they are associated – the closer the points, the

closer the relationship.

Phillips (1995) reported that the use of this form of analysis “has been relatively little

used in social science research in the UK and the USA” and that “this is surprising,

considering how popular the technique is elsewhere”.

3.8.7 Draft Questionnaire Pre-testing

As shown in Figure 3.13, the draft questionnaire then needs to be pilot tested to ensure

that respondents will not have any problems in answering the questions, thus providing

a basis for questionnaire refinement as required. Various scholars have proposed a

number of quite similar approaches with regard to this stage of the process but that of

Robson (2002) is set out in a logical and step-by-step manner.

He suggests that “the draft questionnaire is best pre-tested informally, initially

concentrating on individual questions” (p. 254). This was carried out by colleagues and

friends who provided useful feedback in relation to the clarity of individual questions.

Robson (2002) then suggests that “a second stage uses respondents from the groups of

interest” (p. 254). The author used one of the focus groups (see Chapter 5) for this

purpose. This again provided some useful feedback in terms of individual questions, as

well as in relation to the overall structure of the questionnaire. Finally, Robson (2002)

suggests that “a formal pre-test can now be run as a miniature pilot version of the real

thing” (p. 254) and suggests that at least 20 respondents should be aimed for. This has

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been carried out by the author. The stages in questionnaire refinement are set out in

Figure 3.19 (below).

Figure 3.19: Questionnaire Refinement Process

This refinement process resulted in some relatively minor amendments to the

questionnaire. These amendments mainly involved making the language used somewhat

clearer and ensuring that some of the features of the chosen software (SphinxSurveyTM)

– particularly the “skip-logic” – were used consistently (see section 3.8.8 below). One

question based on Q4D in Table 6.11 – “Does your company formally appraise supply

chain investment opportunities?” – was omitted from the final questionnaire as many of

those consulted during the various pre-test stages found it excessively broad in scope to

give a response with which they were comfortable. In relation to some of the questions

where an opinion was solicited on a statement (for example, question 5 asks

respondents for their views on the statement: “ The language and terminology used to

define SCM contributes to confusion in understanding”) a number of respondents

expressed the view during the formal pre-test that they found these questions somewhat

leading. The author decided to retain these questions given that: (i) the questions relate

to issues of importance in the context of the overall research questions; and, (ii)

responses are solicited using a Likert scale thereby providing respondents with a range

of possible plausible options. Nonetheless, at the analysis phase of the research

particular attention will be paid to any issues that may arise in relation to these

questions.

The final questionnaire (see Appendix 11) comprised 30 questions across six sections,

as well as those that relate to demographic and control information.

3.8.8 Final Design and Planning

Robson (2002) suggests that the main task at this stage is editorial. However, there are

final decisions to be made about: (i) distribution method; (ii) the accompanying letter;

and, (iii) handling non-response bias.

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Distribution method

In terms of a distribution method, three broad approaches were considered: postal

questionnaire; distribution of questionnaire by email; and, web-based questionnaire.

Each has its own advantages and disadvantages. It was decided to use the web-based

approach. This involves locating the questionnaire on a web site, with each respondent

being sent the web address to access it. The survey is then completed online with

responses stored directly in an online database for statistical processing. Survey design

and analysis software packages such as SphinxSurveyTM, SnapTM and SurveyMonkeyTM

support this process. The many advantages of web-based surveys have resulted in their

use becoming very common. It was the chosen approach for the current survey for

various reasons, including:

1. Professional-looking questionnaires can be developed using the software, with

pop-up and drop-down menus providing explanations where necessary;

2. “Skip-logic” enables the skipping over of topics that are not relevant based on

answers to earlier questions;

3. Speedy responses are facilitated; and,

4. Responses are directly input into a database for analysis, thus avoiding

transcription errors.

For SCM and logistics research specifically, Grant et al. (2005) highlighted the

interactivity aspect as a key advantage (similar to point 1 above). They also noted the

potential benefit afforded to the researcher as a result of having the “opportunity to

analyse the response behaviour during completion due to time-data recording during the

completion process by every respondent” (p. 151). There are of course potential

drawbacks associated with web-based approaches, particularly in relation to low

response rates. However, the author’s review of previous SCM empirical research (see

Appendix 7) indicates that those studies which specifically reported the use of email or

web-based surveys had response rates between 9.4% (Wu et al., 2006) and 26.3%

(Ketikidis et al., 2008). This is relatively high given some of the challenges associated

with administering surveys of this kind (as outlined by Grant et al., 2005).

The tool chosen was SphinxSurveyTM. This provides a range of facilities that support the

design of questionnaires. The associated website (www.sphinxonline.net) then hosts the

questionnaire and provides a range of statistical analysis techniques from simple

descriptive statistics to significance testing and correlation/regression analysis. It also

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allows open questions to be analysed by recoding responses to automatically calculate

lexical structures.

Accompanying letter

The next stage involves writing an accompanying letter (for a postal questionnaire) or

some other appropriate means (for example, for web-based questionnaires) to put the

survey into context for respondents. Given that the chosen distribution method is web-

based this letter is essentially the email containing the Internet URL of the website that

hosts the questionnaire (see Appendix 12). This email was designed to establish

research credibility, provide some background to the research project, set out the

response deadline, assure respondent confidentiality, and offer to send participants a

copy of survey results as an incentive. In addition to the letter, the introductory section

in the main body of the questionnaire sets out some guidelines for completion of the

survey.

Non-response strategy

An obvious potential disadvantage associated with the use of questionnaire surveys is

their low response rates. It is important that those who do respond are representative of

the population being researched. As Easterby-Smith et al. (2008) put it:

In itself though, non-response is not a problem, as long as those who do respond

have the same characteristics as those who do not. Of course, there is usually a

big problem in assessing whether this is true, because (obviously) non-

respondents did not respond (p. 213).

However, there are well established techniques for assessing the impact of non-response

bias. Some of these involve comparing those who respond quickly with relatively late

respondents (on the basis that the latter are likely to share certain characteristics with

non-respondents). Others involve ensuring that those who do respond are representative

of the wider population under study in relation to variables such as company size, sector

and location.

3.9 Summary and Some Concluding Points

This chapter has set out the proposed overall research design to be adopted in answering

the four research questions posed. It has done so with reference to:

• the philosophical issues discussed in section 3.2;

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• the methodological issues discussed in section 3.3; and,

• a range of possible research methods and techniques (as discussed sections 3.4).

The overall research design (section 3.5) has been informed by the guidance provided

by Fawcett et al. (2011) in a recent editorial in the Journal of Business Logistics (p.

115):

To add real value and make a real contribution, we must conduct research that

goes beyond merely talking about organizational performance. Our research must

help decision makers improve performance. As we discover specific knowledge

and ultimately synthesize that knowledge into a higher level of integrated

understanding, we can expect two important outcomes: 1. We will advance the

frontiers of the logistics and supply chain disciplines, helping improve corporate

performance and societal well-being. 2. We will find that the business school’s

ugly stepdaughter has grown up - and that she is not just wearing Cinderella’s

glass slipper but she also has a key to the C-suite.

The “business school’s ugly stepdaughter” is a reference to early perceptions of logistics

research in the wider business research community. These points are relevant in the

context of the current research as the work is intended to (see section 3.3.7): be of

practical value to practitioners and policy-makers by providing a detailed understanding

of the current SCM landscape in Ireland; and, contribute in a meaningful way to the

further development of critical SCM theory across the range of domains addressed.

Sections 3.6, 3.7 and 3.8 then set out the detailed design of the three main phases of the

empirical part of this research – the remaining chapters of this thesis describe in detail

the findings from each of these three components. For example, the next chapter (i.e.

Chapter 4) goes on to describe how focussed interviews were used to generate specific

insights into practitioner understanding of the phrase “supply chain management” and

the word “logistics”.

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CHAPTER 4

PHASE I: FOCUSSED INTERVIEWS

4.1 Background and Introduction

As noted in Chapter 2, a plethora of supply chain management (SCM) and logistics

definitions, and an associated range of often quite complex language and terminology,

have been developed in recent years. As noted in section 3.6.1, the focus of this part of

the research is on gaining deep insights into practice, particularly in relation to the

fundamental issue of how practitioners define the key words and phrases (i.e. supply

chain management and logistics). A series of semi-structured (i.e. focussed) interviews

with key informants will provide data to:

i. assess the level of understanding of practitioners, specifically in relation to the

use of the phrase supply chain management and the word logistics; and,

ii. build upon and refine the Four Fundamentals construct.

As further noted in section 3.6.1, it is to a large extent a replication of the work of

Lummus et al. (2001).

The structure of this Chapter is shown in Figure 4.1 (below). Following this

introduction, it provides an overview of the evolution of SCM and logistics, as well as

of the relationship between them (section 4.2). It goes on to look at current practitioner

views of the terms based on a small scale survey which involved interviewing managers

from two manufacturers, two third party logistics (3PL) providers / distributors and two

retailers. Section 4.3 presents an analysis of the data collected during the interviews

leading to a discussion of the main results in section 4.4 across the eight areas shown in

Figure 4.1. Some concluding comments are made in section 4.5.

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4.2 Evolution and Definitions of SCM and Logistics

As noted in Chapter 2, the term SCM was originally introduced by management

consultants in the early 1980s (Oliver and Webber, 1982) and since then several

attempts have been made to place contemporary SCM thinking in an historical context

and/or to plot its historical development and evolution (see, for example: Masters and

Pohlen, 1994; La Londe, 1994; Christopher and Towill, 2000; Lummus and Vokurka,

1999). One particularly instructive perspective was provided by Battaglia (1994) and is

shown in Figure 2.4. It indicates that the evolution of SCM has involved a shift from

highly fragmented to much more integrated approaches with the 1990s characterised as

the decade of “Total Integration”.

The concept of logistics has existed for centuries with most early references to the

concept being found primarily in military applications. Dictionary definitions of

logistics also tend to emphasise the military context. Lummus et al. (2001) discuss

logistics in the contexts of the construction of the great pyramids, the expansion of

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Europe to the Americas and the two World Wars. Over time the application of logistics

has moved into the mainstream business arena. As with SCM, numerous definitions of

business logistics have been proposed. Most refer to the physical movement and storage

of materials.

There are a number of different schools of thought in relation to the relationship

between SCM and logistics. As noted by Lummus et al., (2001), “What is not always

clear is how logistics differs from … supply chain management” (p. 426). Similarly,

Larson and Halldorsson (2004) point out that there was lack of agreement on how SCM

is related to logistics. They go on to identify four conceptual perspectives on SCM

versus logistics: traditionalist, re-labelling, unionist and intersectionist. Their schematic

representation of the perspectives contained in their paper is shown in Figure 2.21.

Whilst each of these approaches is valid in its own way, the authors’ research indicates

that the unionist view – in which logistics is regarded as part of SCM – is the most

widely adopted by scholars. The empirical evidence of Lummus et al. (2001) suggests a

similar perspective amongst practitioners.

As noted in section 2.13.1, the Four Fundamentals could be regarded as “unionist

intersectionist” in the Larson and Halldorsson (2004) framework. It is unionist in that it

does view logistics as one element of the wider SCM field. Logistics, with its primary

focus on the effective and efficient movement and storage of materials, plays a critical

role as part of Fundamental Three. Nonetheless, the strategic and integrative role

assigned to SCM by the intersectionist perspective is in line with the Four

Fundamentals, in particular Fundamental Two. The concept of using SCM as a source

of strategic leverage, as discussed earlier, is in line with this view. This relates directly

back to the need for clear SCM objectives – as articulated in Fundamental One – which

link directly with the overall corporate mission and objectives of an organisation.

4.3 SCM and Logistics Definitions in Practice: analysis of focussed interview data

As noted in section 3.6, this component of the research involved conducting interviews

with a small sample of key informants. The sample comprises two manufacturers, two

third party logistics (3PL) providers / distributors and two retailers. All interviews were

recorded and transcribed. In relation to the analysis of interview transcripts, Easterby-

Smith et al. (2008) describe two approaches: content analysis and grounded analysis.

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The former involves interrogating the data for constructs and ideas that have been

decided in advance. Examples of this are the direct comparison with Lummus et al.

(2001) in section 4.4.5, and the author’s cross-mapping of the findings with the Four

Fundamentals (see section 4.4.6). The latter involves letting the data “speak for itself”

thus allowing for more intuition in guiding the researcher towards an understanding of

the data. The identification of “other issues raised” (see section 4.4.4) is an example of

this. In this way, the author’s approach involves a combination of both approaches, thus

integrating the strengths and mitigating the shortcomings of the two alternatives.

The transcript analysis employed by the author (as shown in Figure 4.2) involved four

main stages in distilling the raw transcript data into information that was analysed based

on comparing and contrasting the main issues set out by respondents. Stage 1 reflects

the advice of Robson (2003) that good transcript analysis has to be aimed squarely at

answering the research questions asked or addressing the overall research objectives.

Stage 2 reflects the fact that repeated use of a particular word or phrase by a single

respondent can not be logically considered to imply that the concept in question is

necessarily of particular importance beyond the specific environment in which that

respondent is based. A considerable amount of time was spent during the interviews in

clarifying terms used by respondents to ensure that the author was absolutely sure of the

intended sense of the terminology used. This is particularly important in the SCM field

where a large number of metaphors are used to describe concepts. Stage 3 (essentially a

two-stage “filtering” process) addressed this issue and was carefully considered during

the planning and execution of the interviews. The final stage involves the analysis of

data based on comparing (i.e. identifying key elements of similarity or convergence)

and contrasting (i.e. identifying key elements of difference or divergence) the main

issues set out by respondents.

The results are summarised in Table 4.1 and indicate the use of a variety of emphases

and approaches amongst practitioners. Interviewees were invited to provide feedback on

this summary to ensure that it was an accurate reflection of the discussion that took

place. Minor modifications were made to the summary based on this feedback.

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Figure 4.2: Transcript Analysis Process

4.4 Discussion of Results

4.4.1 Supply Chain

Most respondents regard the supply chain as a network of companies with Manufacturer

1, Manufacturer 2 and Retailer 2 making specific use of the word “network”. Retailer 2

spoke of a “network of activities” rather “network of companies” but the distinction is

immaterial given the online nature of this business. 3PL1 used the word “pathway” to

describe the network. Retailer 1 drew a distinction between internal (i.e. intra-firm) and

external (i.e. inter-firm) supply chains. Interestingly, the latter was deemed to be “of

little or no importance to our day to day operation”. There was a sense that once the

supply chain fulfils its role in terms of ensuring on-shelf availability (OSA) the detail of

how it is configured and managed is unimportant. Finally, 3PL2’s orientation is based

on the logic of a “buy-make-move-sell” network.

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Firm How do you define supply chain? How do you define logistics? How are these areas related?

Table 4.1: Practitioner Definitions

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Firm How do you define supply chain? How do you define logistics? How are these areas related?

•

•

•

•

•

•

•

•

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•

•

•

•

•

•

•

•

•

•

•

•

•

•

Table 4.1 (continued): Practitioner Definitions

Several respondents make reference to the management of flows:

• Manufacturer 1 notes the need for “coordination of the individual processes

which manage the flow of material, money and information”;

• 3PL2 notes that SCM has a “focus on maximising flows of stocks and services

through the chain by improving the flow of information and cash through the

chain”; and,

• Retailer 2 refers to the flow of “goods, services, information, resources and

money”.

Finally, several respondents make specific reference to the objectives of SCM. For

example, Manufacturer 1 suggests that “the overall outcome meets or exceeds customer

needs while minimising costs throughout the entire chain”.

4.4.2 Logistics

Most respondents consider logistics to be concerned primarily with the movement and

storage of product. Manufacturer 1 specifically uses logistics as a synonym for physical

distribution management. 3PL1 took a broader view with activities such as sourcing,

information management and manufacturing regarded as part of logistics. Interestingly,

Retailer 1 made explicit reference to the movement of people, along with the movement

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of product, in line with some of the original military and dictionary definitions of

logistics. In other words, the key focus of most interviewees was on the forward

movement of materials through the chain, as well as on storage.

Just one respondent (Manufacturer 1) alluded to reverse logistics – “It (i.e. logistics)

may also include the return flow of material through the supply chain for repair or

disposal”. The focus of this company on reverse logistics issues is perhaps not

surprising given its growing importance in the electronics sector as a result of legislative

pressures and environmental imperatives. The focus of all other respondents was

entirely on forward flows.

The paper of Lummus et al. (2001, p. 431) concluded that “logistics is generally viewed

as within one company”. This internal view is evident in the comment of Retailer 1 that

logistics is primarily concerned with “internal planning, execution and control”.

4.4.3 The Relationship Between the Supply Chain and Logistics

Both Manufacturer 1 and 3PL2 regard logistics as a “subset” of SCM. This is in line

with the “unionist” perspective of Larson and Halldorsson (2004). Both 3PL

respondents speak of logistics being concerned with the “mechanics” of SCM.

Similarly, Manufacturer 1 regards logistics as “the execution phase of the flow of

material” and Retailer 2 describes logistics as the operational aspect of SCM. These

views are in line with the “intersectionist” perspective of Larson and Halldorsson

(2004).

Interestingly, Manufacturer 2 regards conventional definitions of SCM as

“aspirational”. This in line with the point made by Storey et al., (2006) when they asked

“who is responsible for managing these (SCM) activities?” They went on to note that:

Just because supply chains may exist it does not necessarily follow that they are

actually managed. Even if they are managed in parts, it does not necessarily mean

that they are managed across the whole spectrum. (p. 761)

The firm view of Manufacturer 2 is that in practice SCM involves the management of

key upstream and downstream dyadic nodes and that anything else is nothing more than

“a theoretical notion”. This reflects the widely held view that there is significant

divergence between the theory and practice of SCM (see section 2.15.2). Nonetheless,

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this approach places this respondent very much in the “unionist” school of thought in

that SCM is seen as being much broader than logistics. Finally, Retailer 1 suggests that

SCM and logistics are “one and the same thing”. In other words, just one of the six

interviewees adopts an approach that is in line with the “re-labelling” perspective of

Larson and Halldorsson (2004).

4.4.4 Other Issues Raised

Many other issues were raised by respondents during the course of the interviews. The

majority of these issues are industry and/or company-specific. For example, Retailer 1

suggested that its relative power over suppliers is such that partnership relationships

based on trust are not deemed to be necessary. One significant issue raised by a number

of respondents relates to the importance of skills and knowledge development in SCM

and logistics. This issue was strongly emphasised by 3PL1:

“The supply chain and its mechanics (i.e. logistics operations) is widely

misunderstood. The learning process for this subject, in my opinion, should begin

at an early age”.

This raises issues in relation to the importance of SCM and logistics education and

training, particularly in the light of developments in supply chain learning. Supply chain

learning (Bessant et al., 2003) is based on firm-to-firm exchange of knowledge, i.e.

leveraging the supply chain as a mechanism to enable learning and competence

development (see section 2.11.5).

4.4.5 Comparison with Lummus et al. (2001)

Given the small-scale nature of the current study and of Lummus et al. (2001), the

resultant problems with generalisability make it difficult to make direct comparisons.

Further, the lack of a detailed description of the methodological approach adopted in the

earlier study makes exact replication impossible. Moreover, as stated by Tsang and

Kwan:

In the replicated study there is a different set of contingencies that either modifies

the postulated mechanisms or invokes previously inactive countervailing

mechanisms (1999, p. 769).

Nonetheless, a number of points are worth highlighting.

Lummus et al. (2001) concluded that “there is general agreement on what logistics

entails” (p. 429). A similar comment can be made in relation to the current study with

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respondents regarding logistics as being largely concerned with the movement and

storage of materials. The concept of logistics being concerned with the operational

execution of SCM is another recurring theme across both studies.

In relation to SCM there is less convergence of opinion both between and within the

two studies. Diversity of opinion as to what SCM entails is evident across all 12

respondents (i.e. six in the current and six in the earlier study). This reflects the specific

challenges and developments in the sectors under consideration. However, there appears

to be a somewhat stronger emphasis in the current study on external integration aspects

of SCM. This could be an indication of progress in relation to internal aspects of

integration over the decade.

Mentzer et al. (2001) suggested that supply chain orientation (SCO) – defined as the

recognition by an organisation of the systemic, strategic implications of the tactical

activities involved in managing the various flows in a supply chain – is a prerequisite

for effective SCM in that it requires that SCO exists in several linked companies across

a supply chain. In other words, attempts to build highly integrated inter-firm networks

require that high levels of intra-firm integration are already in place. This element of the

current study is perhaps a reflection of this point.

Finally, comparative analysis of the two studies does not reveal that practitioner

perspectives have progressed significantly over the last decade and/or that geographical

differences exist. However, larger scale surveys of opinion would be needed for

hypotheses about such differences to be deductively tested.

4.4.6 Interview Findings and the Four Fundamentals of SCM

Table 4.2 summarises the interview findings as they relate specifically to the Four

Fundamentals of SCM (as described in Chapter 2). The transcript of each interview was

analysed and the key words and phrases that most closely relate to each Fundamental

were captured. Table 4.2 also indicates which of the four SCM/logistics perspectives of

Larson and Halldorsson (2004) best describes the view of the respondent. Where a

respondent adopted an approach which comprises elements of more than one of these

perspectives then these are listed in order. For example, the perspective of Manufacturer

1 is primarily unionist in that it regards “logistics as a subset of SCM” but there are

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elements of the intersectionist view in that “logistics is the execution phase” of SCM.

The perspective is, therefore, classified as “unionist/intersectionist”.

Table 4.2 Interview Findings and the Four Fundamentals

In relation to Fundamental One (objectives), four or the six respondents made reference

to service and/or cost objectives. The approach of Manufacturer 1 most closely matches

Fundamental One. Five of the six respondents recognise the existence of the external

(i.e. inter-firm) supply chain and the implicit desirability of holistically managing it.

This is central to Fundamental Two. The other – Retailer 1 – has a strong focus on

management of the internal (i.e. intra-firm) chain of activities. It is also interesting to

note that at least three respondents made specific reference to the “buy-make-store-

move-sell” model (or at least to a variation on that theme). The majority of respondents

stated that the management of flows was an integral element of SCM. Fundamental

Three refers specifically to the management of material, money and information flows.

Some respondents took a somewhat broader view – for example, Retailer 1 suggested

that people movement was a key flow that needed to be managed. Four of the six

respondents made specific reference to relationship issues – the essence of Fundamental

Four. Of these, two (Manufacturer 1 and Retailer 1) made specific reference to the

partnership concept.

In Chapter 2, the author claimed that the Four Fundamentals represents an attempt to

concisely, yet comprehensively, define the essence of SCM, and that it is aimed

primarily at a practitioner audience and aims to bring clarity and understanding to the

issue. Cross-mapping the responses of the interviewees with the Four Fundamentals

(see Table 4.2 above) provides some confidence that these aims have been met. No

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respondent made any statement which contradicted or invalidated the construct in any

way. In point of fact and recognising that sector-specific and company-specific issues

make the development of a generic definition difficult, the approach described by all

respondents is broadly in line with the Four Fundamentals. Moreover, some

respondents’ (notably Manufacturer 1) approaches are virtually indistinguishable from

the essence of the construct.

In terms of the Larson and Halldorsson (2004) perspectives, the predominant approach

observed is unionist or intersectionist. As noted in section 2.13.3 the Four

Fundamentals could be regarded as “unionist intersectionist” in nature: in other words,

the majority of respondents adopted an approach which is broadly in line with the

author’s construct insofar as the relationship between SCM and logistics is concerned.

The exceptions are Manufacturer 2 and Retailer 1, The former – classified as purely

unionist – appeared to have a good knowledge of SCM principles and concepts but

regarded them as “theoretical” and “aspirational”. The latter, which regarded SCM and

logistics as “one and the same thing”, also appeared to have a good knowledge of SCM

principles and concepts but regarded them as being of “little or no relevance” as a

consequence of the firm’s dominant position in the supply chain.

4.4.7 Towards a Model of the Relationship Between SCM and Logistics

In line with the Four Fundamentals of SCM and based on the research described above,

the author proposes a model depicting the relationship between SCM and logistics. This

is shown in Figure 4.3.

Figure 4.3: The SCM and Logistics Domains

A number of features of this model are noteworthy. Firstly, it is based on distinguishing

between the internal (or micro or intra-firm) supply chain and the external (or macro or

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inter-firm) supply chain. The former is based on the “buy-make-store-move-sell” model.

The latter represents the flow of material between firms which comprise the supply

pipeline.

The “buy” link (embracing sourcing, purchasing and procurement of products and

services, as well as activities related to supplier development and supplier relationship

management) in the internal supply chain is specifically deemed not to be part of the

“logistics” domain. This reflects the feedback from all but one of the interviewees. It

also reflects much of the literature. For example, Tan (2001) illustrates the evolution of

SCM from both a purchasing and supply perspective, as well as a transportation and

logistics perspective, and suggests that the SCM literature has developed along these

two quite separate paths. However, activities that specifically relate to the procurement

of transportation and logistics services specifically are considered part of the “logistics”

domain.

The “make” link embraces all supply chain activities that take place within

manufacturing environments. These include issues related to manufacturing strategy

such as plant layout and make-versus-buy decision making (Hill, 1999). It also includes

production planning and control issues, particularly production scheduling and factory

inventory control (Chapman, 2005). Indeed, many of these activities could be regarded

as falling under the “manufacturing logistics” heading (Wu et al., 1997). Nonetheless, in

the author’s model the “make” link is specifically deemed not to be part of the

“logistics” domain. As with the “buy” link, this reflects the feedback from all but one of

the interviewees (Manufacturer 1), as well as much of the literature.

In the author’s model, the “sell” link is the stage in the supply chain where a product

changes ownership as a result of a commercial transaction, usually between a retailer

and a customer. It is at this point that the product assumes value from a customer

perspective; indeed, the commercial transaction is indicative of the customer’s

perception of that value. The field of “retail logistics” is concerned with all of the

supply chain activities that result in a customer being in a position to purchase a product

in a retail outlet (Fernie and Sparks, 2004). In addition, there are a range of logistical

activities that typically take place within a retail outlet. For example, Retailer 1 referred

to “the internal planning, execution and control of the movement of goods” (see Table

4.1). Notwithstanding this, the great majority of feedback from interviewees reinforces

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the perspective adopted in much of the literature that the “sell” link in this context,

while undoubtedly a critical SCM activity, lies outside the specificity of the “logistics”

domain.

For simplicity of illustration the position of the three types of companies interviewed as

part of the current research is indicated. In reality, the external supply chain will in most

cases resemble a network of companies rather than a linear chain. This is analogous to

the distinction between “chain level” (i.e. a series of dyadic relationships) and “network

level” proposed by Harland et al. (1999). In line with the general view of companies

interviewed for this research, the logistics domain is classified as embracing only the

“store” and “move” links in the micro chain. The SCM domain is much broader,

including as it does the planning and control of material and other flows through the

macro chain. In this way, the model adopts the “unionist” perspective of Larson and

Halldorsson (2004). Furthermore, the model indicates the relative breadth and scope of

SCM which tacitly represents its primarily strategic and integrative nature. In this

respect, the “intersectionist” perspective of Larson and Halldorsson (2004) is

incorporated. In line with the Four Fundamentals of SCM and based on the analysis of

the interviews described above, this model might best be described as “unionist-

intersectionist”.

4.4.8 Limitations and Suggestions for Further Work

There are some limitations in this phase of the research as a direct consequence of the

methodology adopted. Other elements of the overall research design aim to address

these limitations. This discussion of the limitations is based on issues of reliability and

validity in qualitative research in management research generally, as well as in

logistics/SCM research specifically.

In reflecting on the validity and reliability of this research, the qualitative criteria

recommended by Lincoln and Guba (1985) have been adopted. They suggested that the

key criteria for judging qualitative research are:

1. Credibility (analogous to internal validity in quantitative research, with Collis

and Hussey (2009, p. 65) defining validity as “the extent to which the research

findings accurately reflect the phenomena under study”);

2. Transferability (analogous to external validity in quantitative research);

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3. Dependability (analogous to reliability – defined by Collis and Hussey (2009) as

“the absence of differences in the results if the research is repeated” (p. 64) – in

quantitative research); and,

4. Confirmability (analogous to objectivity in quantitative research).

Perhaps surprising, a recent paper on the use of focus groups in logistics research

(Sanchez Rodrigues et al, 2010) pointed out that “in the logistics research community,

there is an apparent lack of awareness of qualitative criteria in the evaluation of research

methods” (p. 89). The following sections note how these criteria were addressed in the

current research, as well as how deficiencies identified through consideration of these

criteria can be addressed in future work in this area.

The credibility criterion involves establishing that the results of qualitative research are

credible or believable from the perspective of the participants in the research. Whilst

there is room for improvement in this area in the research described in this chapter, this

issue was addressed to some extent by inviting interviewees to comment on summaries

of the research findings. In any case, qualitative data such as that generated using

focussed interviews are often highly credible in comparison with quantitative data

generated using, for example, large scale surveys.

Transferability refers to the degree to which the results of qualitative research can be

generalized or transferred to other contexts or settings. As noted earlier, the small

sample used in the current research is not intended to be definitive and generalization is

difficult. However, the focussed interview methodology employed enabled the validity

of the Four Fundamentals construct to be assessed (see Table 4.2) and the proposed

model of the relationship between SCM and logistics (see Figure 4.3) to be developed

inductively. This process of relating the empirical findings back to the literature helped

in this regard. The next stage of the work is to empirically test this model using a larger

survey of firms.

The idea of dependability emphasizes the need for the researcher to account for the

changing context within which research occurs. The researcher is responsible for

describing the changes that occur in the setting and how these changes affected the way

the researcher approached the study. In this regard, the author fully documented the

whole focussed interview process, from design through to analysis and feedback.

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Confirmability refers to the degree to which the results could be confirmed or

corroborated by others. The research described in this chapter is part of a larger project

that is based on methodological triangulation, i.e. the focussed interviews represent just

one aspect of a wider research design (see Figure 3.5). The combined

inductive/deductive approach involves the integrated use of:

• focus groups in phase II (to further refine the Four Fundamentals construct as

part of answering RQ1 – see Chapter 5);

• a questionnaire survey in phase III (to assess the current level of SCM adoption

as part of answering RQ2 – see Chapter 6); and,

• a variety of other approaches to inductively address RQ3 and RQ4.

4.5 Concluding Comments

The author recognises the profusion of definitions of, and approaches to, SCM and

logistics in practice. The intent of this chapter is to clarify understanding of the

activities embraced by each and the relationship between them. To this end, the views of

practitioners in manufacturing, third party logistics and retail have been solicited

through a series of focussed interviews based on the template of Lummus et al. (2001).

As well as providing some insights into RQ1, these views form the basis of the

proposed model which illustrates the relationship between SCM and logistics in

practice. Furthermore, the approach of all respondents is broadly in line with the Four

Fundamentals, thus enhancing the author’s confidence in this construct as a “unified

definition of SCM” and a rational basis for exploring in more detail the research

questions set out in Chapter 2.

There is a growing recognition that firms cannot achieve their true competitive potential

by operating in isolation. The philosophy of SCM is firmly based on recognising that it

is only by working in a more integrated manner that competitive advantage can be

maximised. However, for this to become a reality the development of common

definitions and understandings between supply chain partners is a critical success factor.

The corollary of this is that a lack of definitional consistency and a common

understanding is an inhibitor to the successful adoption of SCM thinking in practice.

The model proposed in this chapter addresses this issue with specific reference to the

relationship between SCM and logistics. In this way, a stronger basis is created to

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facilitate the collaborative approaches necessary for the improvement of overall supply

chain capability and performance.

Chapter 5 describes the second phase, and the second qualitative component of the

author’s overall research design, i.e. the focus groups.

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CHAPTER 5

PHASE II: FOCUS GROUPS

5.1 Background

As noted in Chapter 3, the use of the focus group method has been identified as an

element within the overall research design adopted in this research.

The chapter structure is based on a variation of the generic process proposed by Sanchez

Rodrigues et al. (2010) and shown in Figure 5.1 (below). This follows on from Figure

3.6 in Chapter 3.

In relation to the top part of Figure 5.1 (“Research Design and Strategy”), the research

problem and associated research questions have been set out in Chapter 2, based on the

author’s literature review. The research philosophy (multi-paradigmatic) and research

methodology (based on methodological pluralism) to be adopted in answering these

questions are described in Chapter 3, as are the specific techniques and methods to be

used as part of the evolving research design. In particular, Chapter 3 addressed issues

related to: detailed focus group design (sections 3.7.2 to 3.7.4); conducting the focus

group (section 3.7.5); and, analysing the data (section 3.7.6). The focus group method

will be used as part of inductively answering RQ1 and RQ3. This chapter focuses on

how the method has been used as part of answering RQ1, i.e. What is the current level

of understanding of SCM in practice? However, the groups were designed and

conducted to facilitate the emergence of issues that relate to the other three RQs.

Following this introduction, section 5.2 summarises the main findings from the focus

group sessions. Feedback was elicited from participants based on a summary of these

findings – this is outlined in section 5.3. The discussion in section 5.4 reflects on the

planning, execution and analysis of the focus group research based on the four criteria

for qualitative research proposed by Lincoln and Guba (1985) and goes on to explain

how the findings from the focus groups: (i) were used in answering RQ1; and, (ii)

informed further refinement of the Four Fundamentals construct. Finally, some

concluding comments are posited in section 5.5.

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Figure 5.1: Structure of Chapter 5 Based on Sanchez Rodrigues et al. (2010)

5.2 Focus Group Findings

The focus group sessions were carried out in April, October and November 2010.

Appendix 8 contains information about the structure of each of the groups in terms of

job responsibilities, sectors (including a short profile of each participating company),

nationality and gender. The main issues that arose in each focus group session, as they

relate to each of the Four Fundamentals, are discussed in the subsequent sections. In

each case, the summaries are based on:

• Recordings of the sessions;

• Extensive notes taken by the author during the sessions (where he acted as an

observer);

• Points captured on flip charts by the facilitator; and,

• A short report prepared by the facilitator following each session.

The analytical approach adopted by the author is based on the points made in section

3.7.6 and mirrored that used in the focussed interviews in phase I of the empirical

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research (see section 4.3). This combination of elements of content analysis and

grounded analysis allowed the data to be interrogated with reference to constructs and

ideas that have been decided in advance (i.e. content analysis), as well as letting the data

“speak for itself” thus guiding the researcher towards an understanding of the data (i.e.

grounded analysis). This guides the presentation of the findings in the following

sections. For all focus group discussions, the key words and phrases used by

participants are related back to each of the author’s Four Fundamentals, and a number

of other issues raised that are not specifically linked to the construct are highlighted.

5.2.1 Focus Group 1 (FG1)

The key words and phrases used by participants to articulate the main issues that

emerged during the FG1 discussions are outlined in Figure 5.2 (below). Two issues

emerged that were not explicitly referred to in the author’s construct: sustainability and

continuous improvement. They are highlighted in Figure 5.2 in red and are discussed in

their appropriate Fundamentals section.

Fundamental One – Objectives

The idea that a supply chain needed to be adaptable was seen by many participants as

an important issue. Much discussion took place in relation to concepts such as

flexibility and agility, particularly in the context of the recent volatility in many

markets. There was a general consensus that, as one participant put it “it’s not good

enough for things to work today, in today’s market conditions – it must work equally

well in different market conditions”. Several participants highlighted to role the SCM

needs to play in achieving minimum cost and enhanced service quality. Closely related

to the former, the notion of using SCM to improve operational efficiency was also

highlighted by participants; in the context of the latter the need for timeliness, and in

particular for reduced cycle times and improved delivery reliability, emerged as

common themes. Two sub-groups specifically alluded to the concept of value.

However, there appeared to be a lack of clarity and agreement on what the concept is

about. Finally, one word which was used by most sub-groups was optimisation. Again,

there was general agreement that SCM was ultimately about optimising firm financial

performance but a lack a clarity and agreement on what aspects of performance SCM is

primarily aimed at improving.

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Figure 5.2: Summary of Feedback from Focus Group 1

One issue that emerged as a possibly important SCM objective was sustainability,

particularly from an environmental perspective. The participants from the two large

logistics service providers (i.e. 3PL1 and 3PL2) were to the fore in highlighting this

issue.

Fundamental Two – Philosophy

In answering the question “What do you understand by the phrase supply chain

management?” one sub-group initially responded by stating that, “SCM is, of course,

about the management of the supply chain!” This apparently trite and trivial response

was then elaborated by setting out what the group understood by the phrase “supply

chain”. In this context, the concept of a network of companies was introduced. The need

for this network to operate in a way that ensures supply/demand synchronisation was

highlighted. Several participants elaborated on the network concept by providing a

broad description of the supply chains of which their organisations are part using the

source to customer model (or the “from the farm to the fork” food industry variant) and

highlighting the need for better integration of inter-firm business processes.

Furthermore, the effective measurement of performance was regarded as a key enabler

in this regard. A couple of other specific issues were raised. The need for a life cycle

perspective was introduced by the participant from pharmaceutical manufacturer

MAN2. His point was that SCM issues should be considered from initial product

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concept through product development and introduction through to the end of a product’s

life cycle. Interestingly, this participant’s background was largely in the product

design/new product introduction area but his point found general agreement amongst

participants.

The other issue that emerged as a possibly important aspect of SCM philosophy was

that of continuous improvement. This built on the statement made by one participant

that: “it’s not good enough for things to work today, in today’s market conditions – it

must work equally well in different market conditions”. There was general agreement

that the culture of continuous improvement (or kaizen) is an important dimension if the

performance of a supply chain is to be sustained over a period of time.

Fundamental Three – Flow Management

All participants agreed that information flow management was a central issue in SCM,

with several providing an overview of the ICT systems in use in their organisations.

This led to a discussion about the importance of inventory visibility as a prerequisite for

effective inventory management. Several participants explained their roles in the

planning of supply chain processes. As aptly put by one participant, “supply chains

don’t plan themselves – the planner needs to be pro-active in this regard”.

No other issues specifically relevant to Fundamental Three that are not explicitly

captured by the construct were raised by participants.

Fundamental Four – Relationships

There was general consensus that relationships (internal and external), and their

management, are critical in SCM. The word “alliances” was used by several

participants in this context. There was also general agreement that SCM is about

communication (again, internal and external) with a number of participants relating

interesting stories to illustrate the consequences of weaknesses in this regard. There was

unanimity that better teamwork was the key to achieving improvements in this area.

No other issues specifically relevant to Fundamental Four that are not explicitly


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Other Issues

Following a presentation of the Four Fundamentals, participants were then asked to

consider and comment on the validity of the construct in general terms, as well as on its

specific applicability in their own sectors. A number of points emerged.

Generic definition. It was widely agreed that the development of a generic definition

(i.e. one that is relevant in every detail to every firm in every sector) is a difficult task.

The reality is that different drivers and strategic imperatives exist in every firm.

Nonetheless, all participants agreed that all components of the construct were relevant

to a greater or lesser extent in their organisations. However, there was a widely held

view that the basic construct would need to be adapted somewhat in each individual

company and sector to reflect specific concerns. For example:

• the public sector participant (PS1) felt that the language used would need to be

modified somewhat to reflect the not-for-profit nature of a public sector body;

• the participant from SW1 specifically introduced the idea of supply chain for

products/services, i.e. those that supply offerings to the marketplace that are a

mix of physical product and services or, as is often the case with software,

mixed physical/digital products;

• the pharmaceutical industry participant (MAN2) was strongly of the view that

for any definitional construct to be meaningful in his sector it would need to

reflect the highly regulated nature of the pharmaceutical industry; and,

• several participants felt that the construct in general, and Fundamental Four in

particular, needs to emphasise more clearly the role of relative firm power and

its role in determining supply chain dynamics.

Customer focus. Despite the fact that the concept of customer service “setting the spec”

is a major element of Fundamental One, there was a widely held view among

participants that the concept needs to further emphasise the importance of customer

focus. This issue prompted an interesting discussion and debate on the use of the word

“supply” in the phrase “SCM”. Several participants felt that this implies a focus on the

buy side of the supply chain and an attendant supply-driven “push” orientation, i.e.

rather than a demand-focused “pull” orientation.

Leadership. A view also emerged during the discussion that the construct fails to

emphasise the role of leadership in making supply chain change and improvement

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happen. Interestingly, this view was most strongly held by those more experienced

participants who hold relatively senior leadership roles within their organisations

(notably MAN3 and 3PL2). It was felt that the definition was somewhat passive in the

sense that for demonstrable supply chain change to be implemented in practice there

needs to be a clear, leadership-driven, vision and strategy for change.

Buy-in . There was also a perspective expressed that, in addition to leadership and

senior management commitment, the construct needed to stress the importance of

employee involvement and “buy-in” in the supply chain change and improvement

process. Several participants indicated their frustration at change being imposed in a

top-down manner by senior management without proper consultation and employee

involvement. Interestingly, this view was most strongly held by those less experienced

participants who hold relatively junior management or supervisory roles within their

organisations (notably MAN2 and PS1). This perspective also appeared to be more

strongly held by those from larger organisations.


The key words and phrases used by participants to articulate the main issues that

emerged during the FG2 discussions are outlined in Figure 5.3. Again, two other issues

not explicitly referred to in the Four Fundamentals emerged – stakeholders and

acquisition of supply chains – and are discussed where appropriate.


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There was general agreement among participants that the key to establishing robust

supply chain objectives was the need for a strong focus on customer needs throughout

the supply chain. Several participants referred to the “seven rights” of logistics/SCM or

a variation on this theme. This construct (see, for example, Lambert and Stock (1992))

states that the role of logistics/SCM is to ensure the availability of the right product at

the right time in the right quantity in the right condition at the right place for the right

customer at the right cost. Several participants felt that the “seven rights” provided a

good working definition of SCM. However, as the discussion progressed a general

consensus emerged that, whilst it might provide a checklist of the main objectives of

SCM, the “seven rights” does not represent a complete definition of SCM itself. A

number of participants felt that the “seven rights” relate more to logistics specifically

rather than the wider SCM domain.

One issue not explicitly referred to in the author’s construct that emerged as a possibly

important issue in this context was that of identification of stakeholders. One of the

public sector participants (PS3) felt that wider business objectives, as well as more

specific SCM objectives, must be formulated with specific reference to an

organisation’s main stakeholders. In the case of a public sector organisation such as PS3

this raises a number of questions, most notably “who is the customer?” The customer

could be the end-user of the service, the Government, members of the public (i.e.

“taxpayers”) or some other stakeholder(s). Each has its own specific aspirations and

they are often incompatible with those of other stakeholders. In any case, a challenge for

public sector organisations relates to: (i) identification of the key customer/stakeholder

groups; and (ii) formulation of objectives that relate to the aspirations of these groups.

The other public sector participant (PS2) identified with this challenge and presented

some examples to illustrate this point. In a similar vein, the PS3 participant noted that in

a highly regulated industry such as hers, the regulatory bodies are key stakeholders and

the formulation of objectives should reflect their pivotal role. This point was reinforced

by the MAN6 participant, also from a sector that is highly regulated (i.e. life sciences).


Participants generally concurred that a supply chain is a chain of activities. These

activities start and end with the customer (i.e. customer to customer). Thus, SCM starts

with the identification of a customer requirement and ends when that requirement has

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been satisfied. A number of participants were more comfortable with the “source to

customer” model of the supply chain. The discussion converged towards the view that

sourcing of material and service inputs is one of the important activities in the chain –

hence the customer to customer (via source) concept. Several participants suggested that

SCM is a process, i.e. a group of interconnected and inter-related activities. In this

context, there are issues that need to be addressed in relation to organisation design and

structure. The focus here needs to be on replacing traditionally fragmented

organisational structures with configurations that are characterised more by integration

(fragmentation to integration).

The food manufacturing participant (MAN7) noted that part of the strategy of his parent

company involved the acquisition of successful supply chains in sectors in which it

wanted to develop a presence. This reinforces the key element of Fundamental Two that

“supply chains, not companies, compete”. His own organisation was the subject of such

an acquisition in 2001.


Participants generally agreed that managing the movement of resources throughout the

supply chain was a key SCM activity. This is not just about the physical movement and

transportation of products but also relates to the management of the flow (of products,

information and money). The discussion also resulted in the general consensus that

management of the key flows provides the basis for effective supply chain control. As

one participant succinctly put it: “if you want to control anything you must have

visibility – management of the information flows is central to this”.

No other issues specifically relevant to Fundamental Three that are not explicitly



The concept that overall supply chain performance is dependent on the nature of the

interaction between supply chain activities was acknowledged by most participants.

This recognises the interdependency that exists between the various activities. It was

further recognised that this interdependency extends beyond the internal activities

within a firm into activities and processes that span organisational boundaries. The use

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of outsourcing as an element of strategy by organisations in recent years has made this

issue more important.



Other Issues




One size fits all. There was general agreement among participants that it is very

difficult to develop a generic definition of SCM. One participant raised the question:

“does one size fit all firms in terms of defining SCM?” The general consensus was that,

while the overall thrust would not differ hugely between firms from different sectors,

the detailed issues that needed to be addressed would vary considerably. Several

participants introduced sector-specific, or even firm-specific, issues to illustrate such

differences. For example, the public sector representatives suggested that while the

cost/customer service approach articulated in Fundamental One was robust, there is a

need a broaden the scope of the objectives to reflect their particular strategic drivers (see

above). The focus group also suggested that it was difficult to develop a definitional

construct that has validity for product, service and digital supply chains. For example,

the participant from 3PL6 felt that the language used in the construct was heavily

product-oriented thus reflecting much of the published work and examples of good

SCM practice. She felt that the language would, therefore, need to be adapted by

providers of service products (i.e. as opposed to physical products) to reflect the nature

of their businesses. The SW2 participant made a similar point in relation to digital

products (i.e. software in this case).

Of particular note was the discussion that took place specifically in relation to the food

supply chain35. The discussion suggested that firms from different parts of the supply

chain have different emphases in terms of their understandings of SCM and that this

might make it more difficult to achieve higher levels of integration between them.

35 MAN7: processing and distribution; 3PL7: distribution; 3PL8: distribution to retail partners; 3PL9: distribution, wholesale and retail.

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Dynamic. The 3PL9 participant raised the need for supply chains be dynamic, by which

she meant highly responsive to the changing business environment and to changes in

customer requirements. Some participants felt that this need for dynamism was implicit

in the Four Fundamentals (in particular in Fundamental One with its emphasis on

customer service). A consensus emerged that dynamism in this context was more an

issue of good supply chain practice rather than something that needed to be explicitly

captured in a definitional construct.

Risk and uncertainty. A lengthy discussion took place in relation to the inherent

uncertainty in the business environment and the need to manage the attendant risk

factors in the supply chain. Several participants raised the related issue of resilience in a

supply chain context. The general consensus was that the economic volatility and

turbulence of recent years had resulted in new challenges for supply chain professionals

in the execution of their day-to-day responsibilities. The downturn had also resulted in

the downsizing of many of the participants’ firms; this in turn resulted in many

participants fearing for their own futures (a fear compounded by the fact that the MAN6

participant was about to lose her job as a result of that firm closing its Irish

manufacturing operations). In any case, the overall view was that these pressures, while

very real and current for participants, did not impact directly on how SCM should be

defined.


The key words and phrases used by participants to articulate the main issues during the

FG3 discussions are outlined in Figure 5.4 (below). Continuous improvement again

emerged as did sales and operations planning (S&OP).

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All participants agreed that it was the customer, in terms of service and other

expectations, that drives the supply chain. Of particular interest in this context was the

fact that all participants agreed with the statement that “it is the customer that should

drive the supply chain” while a minority stated that this actually happened in practice.

The MAN8 participant explained how excellence in customer service was a source of

strategic differentiation in his business. He explained that quality (in terms of product

specification, functionality and performance) was a given (i.e. an order qualifier) and

the price was under serious downward pressure in an increasingly competitive

marketplace. Other participants could, to a greater or lesser extent, provide similar

examples from their organisations.

No other issues specifically relevant to Fundamental One that are not explicitly



The need for a life cycle (or cradle-to-grave) perspective was subscribed to by the four

participants from manufacturing organisations. The point is that SCM needs to be a

consideration from initial product concept through to product development and

introduction and through to the end of a product’s life cycle. A MAN8 example in

relation to postponement illustrated this point – i.e. products have to be designed to

enable a postponement or late configuration strategy to be adopted. All participants

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agreed that SCM was end-to-end (i.e. from the supplier’s supplier to the customer’s

customer). The MAN9 participant introduced a specific distinction between strategic

and tactical SCM. Her strongly held view was that her role was a tactical one which

was primarily concerned with execution. Execution in this context refers to execution of

a supply chain strategy into the development of which she felt she made little input. All

participants expressed a degree of frustration with their lack of involvement in the more

strategic dimension of the subject. The participant holding the most senior position

(from MAN6), and the only participant with a genuine end-to-end supply chain

responsibility, asserted that SCM is first and foremost a strategic issue. He further stated

that if not treated as such – i.e. if the focus is mainly tactical or operational – then this

inevitably results in “fire-fighting” and crisis management throughout the supply chain.

These sentiments found strong resonance among all other participants. The group’s

conclusion was that SCM needs to be proactive with a concern for building supply

chain capability in advance of the requirement (i.e. rather than being primarily about

reacting to periodic crises). In line with this, participants were strongly of the view that

a more holistic approach was needed if proper co-ordination of internal supply chain

processes was to be achieved. There was also a widely held view that a robust

performance measurement system, based on an agreed set of key performance

indicators (KPIs), was the key to achieving continuous improvement. There was a

lengthy discussion about the nature of KPIs used in participants’ supply chains. The

general consensus was that determining an appropriate set of KPIs is very dependent on

the specific nature of a firm’s markets, customers and cost drivers, as well as on other

strategic imperatives. Nonetheless, there was a widely held view that inappropriate

performance measurement can accentuate fragmentation between supply chain

processes (both internally and externally). The MAN8 participant illustrated this point

with his experience of negotiating with suppliers with a view to securing lower unit

prices – a process driven by the KPIs imposed on the purchasing function. The direct

consequence of this was lower unit prices, achieved by purchasing in bulk, but higher

costs elsewhere in the supply chain (particularly in terms of inventory holding costs).


important aspect of SCM philosophy was that of continuous improvement. As noted

previously, there was a widely held view that a robust performance measurement

system, based on an agreed set of key performance indicators (KPIs), was the key to

this.

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All participants recognised the importance of the management of material movement

through the supply chain as a key element of SCM. They further recognised the

importance of the related issue of inventory management. The 3PL10 participant

expressly referred to inventory management as a “microcosm” of the wider SCM

domain, with its focus on balancing cost and service objectives. Participants also

broadly agreed that, in addition to materials and inventory management, the

management of money flows and information flows were important. The MAN10

participant introduced the concept of managing the reverse flow of materials (i.e. from

customer back to supplier) and reverse logistics and it was generally agreed that this

was an aspect of SCM that was likely to grow in importance in the future in the light of

legislative developments and increased environmental awareness.


important aspect of Fundamental Three was that of sales and operations planning

(S&OP). The focus group later concluded that, whilst this terminology was not

explicitly used in the Four Fundamentals, S&OP was implicitly captured in the

construct. The point is that supply chains have to properly planned with a strong focus

on synchronising supply and demand and that this can only be achieved by planning

sales and operational processes in an integrated way. These points are probably most

closely associated with Fundamental Three but also find expression elsewhere in the

author’s construct.


Participants recognised that interfaces between supply chain processes (both internal

and external) have to be properly planned and executed. The specific case of customer

relationship management (CRM) was raised by several participants as an illustration of

how this applies in the specific case of managing the interface with key external

customers.



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Other Issues




Service supply chains. The participants from the 3PL sector and PS1 expressed

concern that the construct was heavily based on product supply chains. It was felt that

the detail would need to be modified for the construct to find more resonance in service-

oriented organisations.

Language. Following on directly from this issue, the participants from the 3PL sector

and PS1 expressed concern that the construct made extensive use of language and

terminology associated with manufacturing industry. It was felt that the language and

terminology would need to be re-visited if the construct is to find more resonance in

non-manufacturing organisations. The four participants from manufacturing

organisations made the point that language and terminology tends to be sector-specific

and that therein lay the crux of this challenge.

Pre-requisite. The MAN9 participant raised the specific question as to whether high

levels of internal integration were a pre-requisite for external integration. There was

general agreement – at least on a conceptual level – that this was the case. However,

participants struggled to illustrate this opinion with concrete practical examples.

People and senior management. The MAN8 participant was of the view that “supply

chains are really about people” and that this does not come out clearly enough in the

Four Fundamentals. He noted that customers are people, suppliers are people, and that

supply chains are directed, planned and executed by people. He further stated that

unless there was serious senior management buy-in to the need for change in supply

chains that such change could never happen. Much of the discussion around this point

reverted to issues concerning the difference between strategic and tactical SCM (see

above). Nonetheless, there was broad agreement that the people dimension should be at

the core of any worthwhile definition of SCM.

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5.3 Participant Feedback

Krueger (1998) suggests that focus group process should culminate in the writing of a

final report and dissemination of feedback to participants. However, the logistics papers

reviewed by Sanchez Rodrigues et al. (2010) and summarized in Appendix 8 to this

Chapter provided no information on this feedback process.

Summaries of each of the focus groups, using a similar format to those set out in section

5.2 (above) were distributed to group participants for comment. Some participants

reverted to the author in relation to relatively minor points of detail. This process

ensured that the summaries were an accurate representation of the discussion sessions,

thus enhancing the credibility of this element of the research. As noted in Chapter 4,

credibility is analogous to internal validity in quantitative research, with Collis and

Hussey (2009, p. 65) defining validity as “the extent to which the research findings

accurately reflect the phenomena under study”.

5.4 Analysis and Discussion

This section focuses on three specific issues. Firstly (in section 5.4.1), the author

reflects on the planning, execution and analysis of the focus group research based on the

four criteria for qualitative research proposed by Lincoln and Guba (1985). This

includes an explanation of how testing for data saturation was carried out. It also results

in a number of limitations of the focus group method being identified and attendant

suggestions for further work being proposed. Section 5.4.1 adopts a similar approach to

that of section 4.4.8 in relation to focussed interviews. Section 5.4.2 goes on to explore

how the findings from the focus group research can be used to answer RQ1, i.e. “What

is the current level of understanding of SCM in practice?” Section 5.4.3 explains how

the focus group data has been used to refine the Four Fundamentals construct – this is

analogous to section 4.4.6 in relation to focussed interviews and uses the concept of

theoretical saturation as its basis.

5.4.1 Qualitative Criteria: Reflection and Evaluation

As noted in relation to the focussed interviews described in Chapter 4, if the

shortcomings of any qualitative research method are to be mitigated then their efficacy

should be assessed using well established evaluation criteria. As also noted in Chapter

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4, Lincoln and Guba (1985) recommended four criteria: credibility, transferability,

dependability and confirmability. However, the focus group research carried out to date

in the logistics/SCM domain has been largely characterized by a lack of awareness of

such qualitative criteria and, while transferability and confirmability issues are

addressed in much of the logistics/SCM focus group work, there is evidence of limited

consideration of credibility and dependability issues (Sanchez Rodrigues et al., 2010).

Sanchez Rodrigues et al. (2010) suggest a number of practical approaches that can be

adopted to enhance the validity and reliability of focus group research in logistics/SCM.

The following sections indicate how the author used these and other approaches in the

planning, execution and analysis of his focus groups.

Credibility

Sanchez Rodrigues et al. (2010, p. 89) suggest that credibility can be enhanced “by

testing for theory saturation and inviting participants to comment on summaries of the

research findings”.

Data saturation. There is a lack of guidance in the literature in relation to how data

saturation testing can be rigorously carried out. Figure 5.5 (below) summarises how the

author approached the task. Parts (a), (b) and (c) of this table reproduce the key words

and phrases used by participants to articulate the main issues that emerged during the

three focus groups sessions (i.e. Figures 5.2, 5.3 and 5.4 respectively). As shown in part

(d), a total of 27, 20 and 21 key words or phrases were captured for FG1, FG2 and FG3

respectively. In the case of FG1, for example, this comprised 23 key words or phrases

from the initial part of the focus group discussion (i.e. in response to the facilitator’s

question “What do you understand by the phrase supply chain management?”). Of

these, two were concepts (i.e. sustainability and continuous improvement) not explicitly

captured by the Four Fundamentals construct. For FG1, a further four key words or

phrases captured the group’s considerations and comments in relation to the validity of

the construct in general terms, as well as on its specific applicability in participants’

own sectors. Thus, for FG1, 23 (2) + 4 = 27. Similarly: for FG2, 17 (2) + 3 = 20; and,

for FG3, 17 (2) + 4 = 21. Most importantly from a data saturation perspective, part (e)

of Figure 5.5 shows the new words and phrases that emerged during FG2 and FG3. For

FG2, there are eight new words or phrases; for FG3, there are five. Figure 5.6 shows the

number of new words or phrases introduced across the three sessions for each of the

Fundamentals and in relation to other issues.

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Figure 5.5: Testing for Data Saturation

0

5

10

15

20

25

30

Number of new words or

phrases

1 2 3

Focus Group

Other

Fundamental Four

Fundamental Three

Fundamental Two

Fundamental One

Figure 5.6: New Words or Phrases in Focus Group Sessions

Examining the five new words or phrases from FG3 led the author to conclude that data

saturation had been reached. Of these five, the first (i.e. differentiation) relates to the

concept of customer service as a source of strategic differentiation. Whilst this concept

was not explicitly set out in FG1 or FG2, the author and the facilitator felt that it had

been implicit in discussions, particularly in relation to value in FG1 and the need for a

focus on customer needs in FG2. A similar situation was evident in relation to the

second key phrase, i.e. strategic and tactical. FG1 and FG2 tended to focus on more

strategic aspects of SCM during their sessions. However, the focus on planning in FG1,

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and on control in FG2, were primarily concerned with the tactical rather than the

strategic dimension of SCM. The third new concept introduced by FG3 was that of

reverse logistics. Whilst this particular terminology was not used by FG1 and FG2

participants, the underlying concept was implicit in their deliberations. This was

particularly the case in the FG1 discussion of the life cycle perspective and in the FG2

discussion on movement and flow. The fourth new phrase, i.e. sales and operations

planning, was just that – a new phrase. The underpinning concepts had already emerged

during the earlier focus group sessions. This was particularly the case in the FG1

discussion of supply/demand synchronisation and the FG2 discussion in relation to flow

management and control. Finally, the notion that internal integration is a pre-requisite

for external integration raised by FG3 had not been in any way alluded to by FG1 or

FG2. However, as noted in section 5.2.3, this was a question raised by one participant

during the discussion. As further noted in section 5.2.3, whilst there was general

agreement on a conceptual level about this point, participants struggled to illustrate this

opinion with concrete practical examples.

Based on his work in this area, the author takes issue with Sanchez Rodrigues et al.

(2010). Their paper fails to make a clear distinction between data saturation and

theoretical saturation. They use the phrase “theory saturation” throughout their paper

when referring primarily to data saturation. Whilst, as noted by Bryman and Bell

(2003), they are similar concepts they address quite different issues. The discussion

above refers only to data saturation and the approach adopted by the author in

concluding that three focus group sessions were sufficient in the current research. As

noted earlier, theoretical saturation occurs when the researcher can assume that her/his

emergent theory is adequately developed to fit any future data collected. This concept is

much more pertinent to the author’s attempt to refine the Four Fundamentals construct

– see section 5.4.3.

Participant feedback . In addition to testing for data saturation, as noted in section 5.3

participant feedback was invited and this has been incorporated as appropriate into the

discussion summaries set out in section 5.2 (above). In any case, qualitative data such as

that generated by the author using the focus group method is often highly credible in

comparison with quantitative data generated using, for example, large scale surveys.

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Transferability

The relatively small sample consulted during the focus group sessions (i.e. 28

individuals in total) is not intended to be definitive and transferability (or

generalization) is, therefore, difficult. Nonetheless, Sanchez Rodrigues et al. (2010)

suggest that transferability can be enhanced by: (i) ensuring that diverse groups of

specialists take part; and, (ii) relating the findings back to the literature. As noted in

section 5.2 (above) participants come from a range of different industry sectors and

backgrounds, as well as being diverse from a nationality and gender perspective. Given

that the focus group method was used to a large extent by the author to refine the Four

Fundamentals construct, the process did explicitly make continuous reference back to

the literature. In other words, the Four Fundamentals were inductively derived from the

literature and each focus groups session made direct reference back to this construct.

Dependability

In relation to dependability, Sanchez Rodrigues et al. (2010, p. 89) note that “here it was

critical that the researchers fully document the whole focus group process, from design

through to analysis and feedback”. In this regard, the author fully documented the whole

focus group process, from design through to analysis and feedback – indeed, this

documentation forms the basis of this chapter.

Confirmability

Finally, confirmability – the degree to which the results could be confirmed or

corroborated by others – can be achieved by using the focus group method as part of a

wider triangulated research design, as is the case in the current research. The research

described in this chapter is part of a larger project that is based on methodological

triangulation, i.e. the focus groups represent just one aspect of a wider research design.

The combined inductive/deductive approach involves the integrated use of:

• focussed interviews in phase I (as described in Chapter 4); and,

• a questionnaire survey in phase III (aimed primarily at answering RQ2 and

deductively testing the refined Four Fundamentals construct – see Chapter 6).

5.4.2 Using Focus Group Data to Answer RQ1

RQ1 asked: “What is the current level of understanding of SCM in practice?”.

Participants were chosen from a range of different industry sectors and backgrounds, as

well as being diverse from a nationality and gender perspective, to enhance

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transferability of the findings. Nonetheless and as noted previously, the relatively small

sample consulted during the focus group sessions (i.e. 28 individuals in total) means

that providing a definitive response to this question is difficult. Notwithstanding this

caveat, the author has conducted an analysis of the data collected during the focus group

sessions with a view to providing fresh insights into this question. The following

paragraphs describe this analysis.

Figure 5.7 (below) shows an overview of the Four Fundamentals construct. This is

based on Table 3.5 (above), which in turn is based on the indicated sections and sub-

sections in Chapter 2 (from section 2.8 through to section 2.11). For each Fundamental,

Table 3.5 contains an introductory section and one entitled “Summary and Some

Concluding Points”. For the purposes of this analysis these sections have been omitted.

The focus is, therefore, on the substantive constituent elements of each of the

Fundamentals. In this way, thirteen key concepts (three for each of Fundamentals One,

Two and Three; four for Fundamental Four) are used to describe the essence of the

construct, with the core of the presentation made by the author during the focus group

sessions being based on these concepts.

Figure 5.7: Overview of the Four Fundamentals

The essence of this analysis is based on a comparison of these concepts and associated

phrases with the words and phrases used by focus group participants to articulate their

responses to the facilitator’s question “What do you understand by the phrase supply

chain management?” In all, 51 key words or phrases that relate to the Four

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Fundamentals were used by participants: 21 in FG1; 15 in FG2; and, 15 in FG3 (see

Figure 5.2(d)). Tables 5.1 to 5.4 show how these words and phrases were used in

relation to each of the thirteen constituent elements that the Four Fundamentals

comprise. In essence, each table shows how focus group responses are mapped against

the key constituent concepts of each Fundamental in turn.

As shown in Table 5.1 all three focus groups specifically alluded to the need for a focus

on customer needs generally, and on customer service issues specifically. FG3

emphasised the role of customer service as a source of strategic differentiation. Just one

group (FG1) referred to SCM financial objectives (in terms of minimizing cost and

improving efficiency). However, by introducing the “seven rights” FG2 also implicitly

acknowledged the importance of the cost dimension. The need for simultaneous

consideration of customer and financial objectives was acknowledged by FG1 and FG2

with their focus on value and the “seven rights”. With the exception of FG3’s absence

of an explicit reference to financial objectives, a clear understanding of the main

components of Fundamental One was evident across the focus groups.

Table 5.1: Fundamental One and Focus Group Responses

Table 5.2 indicates that all groups had a strong emphasis on external integration with a

variety of terminology being used to articulate this concept. FG1 did not discuss internal

integration explicitly but it could be argued that the concept was implicitly referred to in

their deliberations, particularly those that concerned the need for more integrated supply

chain processes. FG2 made no mention of performance measurement but the other two

groups, FG3 in particular, emphasized this aspect very strongly. Overall however, a

clear understanding of the main components of Fundamental Two was evident across

the focus groups.

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Table 5.2: Fundamental Two and Focus Group Responses

FG1 did not allude to the flow of money as being an element of SCM. With this

exception, as shown in Table 5.3 each group recognized the role of materials, money

and information flow management in the management of supply chains, thereby

suggesting a clear understanding of the main components of Fundamental Three.

Table 5.3: Fundamental Three and Focus Group Responses

As shown in Table 5.4, all focus groups emphasised strongly the importance in SCM of

relationships and their effective management. The trend towards outsourcing of supply

chain functionality and the concomitant vertical disintegration of supply chain

architectures was highlighted by just one group. The concept of “strategic partnering”

and supply chain partnerships was not explicitly considered by any of the groups.

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Table 5.4: Fundamental Four and Focus Group Responses

However, this may be a terminology rather than a substantive issue. On reflection,

comments made by the author during his presentation of the Fundamental Four may

have inadvertently contributed to this in the case of FG1 and FG236. In relation to the

people dimension, in FG1 there was unanimity that better teamwork was the key to

improving communication and building more effective relationships. With this

exception, the other aspects of the people dimension of SCM (as set out in section

2.11.5) were not specifically alluded to by the groups. However, FG1 and FG3 did

emphasise other aspects of the people dimension – as noted previously, FG1 noted the

importance of leadership and buy-in, with FG3 emphasising people and senior

management issues. This suggests that, with some omissions, the three focus group

sessions show a clear understanding of the main components of Fundamental Four.

Overall, the great majority of the 13 key constituent concepts captured in the Four

Fundamentals construct were recognized by the focus groups in answering the question:

“What do you understand by the phrase supply chain management?”. Indeed, a number

of issues not explicitly captured in the construct were highlighted by participants. Given

the author’s contention that the Four Fundamentals represents a comprehensive

definition of SCM, this analysis suggests that that a thorough understanding of the main

elements of SCM is evident from the focus group sessions.

5.4.3 Four Fundamentals Construct Refinement

Figure 5.8 (below) sets out those key words and phrases used by participants across all

three focus groups that are not explicitly part of the author’s Four Fundamentals

36 In his presentations to FG1 and FG2 the author proffered the opinion that “the word ‘partnership’ is probably one of the most abused words in the SCM lexicon”. However, this view was not expressed in the presentation to FG3.

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construct. These are taken from Figures 5.2, 5.3 and 5.4 in relation to FG1, FG2 and

FG3 respectively.

Figure 5.8: Four Fundamentals Refinement

Fundamental One

The first issue relates to sustainability, particularly from an environmental perspective.

There is a need to more specifically and explicitly acknowledge that sustainability,

along with the customer service and financial issues discussed earlier, is in itself a key

objective of SCM. This is analogous to the so-called “triple bottom line” approach, a

phrase originally coined by John Elkington (Elkington, 1979) and associated with

Andrew Savitz (see, for example, Savitz, 2006), and focused on people, planet, and

profit. A widely cited definition of sustainability is incorporated into the 1987 report of

UN World Commission on Environment and Development (WCED), also known as the

Brundtland Commission. This report – Our Common Future – defines sustainable

development as “development that meets the needs of the present without

compromising the ability of future generations to meet their own needs” (Bruntdland

Commission, 1987, p. 54). This focus on meeting present needs without compromising

the future is in essence what the concept of sustainability is about. Adapting this

definition slightly provides a useful definition of a sustainable supply chain:

A sustainable supply chain is a supply chain that meets the needs of the

present without compromising the ability of future generations to meet

their own needs.

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This definition recognises the fact that business activities can have detrimental effects

on the planet’s natural systems and encourages all actors in the wider supply chain to

adopt policies and practices that promote environmental protection. The Four

Fundamentals should be refined with this in mind.

A second issue not explicitly referred to in the Four Fundamentals is that of

identification of stakeholders. The concept recognises that wider business objectives, as

well as more specific SCM objectives, must be formulated with specific reference to an

organisation’s main stakeholders. A stakeholder in this context might be defined as “any

group or individual who can affect or is affected by the achievement of the

organization's objectives” (Freeman, 1984, p. 46). The existing construct recognises that

two of the key groups of stakeholders in any enterprise are owners (i.e. shareholders)

and customers – hence the emphasis on financial and customer service objectives. In

addition, by incorporating a sustainability-related objective the fact that wider society is

a stakeholder in any firm is also recognised.

The author accepts that this in not an exhaustive list of the stakeholders of a typical

enterprise. For example, employees and suppliers are also stakeholders in any

organisation based on the above definition. As noted during FG1, regulatory bodies are

important stakeholders in industries characterised by high levels of regulation such as in

the pharmaceutical sector. Mitchell et al. (1997) recognise that a myriad stakeholders

exist and that they are of greater of lesser importance depending on the nature of an

organisation and its business environment.

The author therefore contends that the focus on owners (i.e. shareholders), customers

and wider society is sufficient for the majority of situations in terms of specifying the

main overall SCM objectives. Any attempt to develop an exhaustive list of stakeholders,

and to identify the associated SCM objectives, would inevitably result in Fundamental

One becoming very cumbersome, thus failing in the construct’s attempt to provide a

“concise and comprehensive” definition of SCM (see Chapter 2). This analysis also

relates to an extent to the difficulties inherent in any attempt to develop a generic

definition (see Generic definition; One size fits all below).

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Fundamental Two

One issue not explicitly referred to in the author’s construct that emerged in both FG1

and FG3 as a possibly important aspect of SCM philosophy was that of continuous

improvement. There was general agreement among FG1 participants that the culture of

continuous improvement is an important dimension if the performance of a supply chain

is to be sustained over a period of time. FG3 participants went further by positing the

view that a robust performance measurement system, based on an agreed set of key

performance indicators (KPIs), was important in this regard.

It was noted in Chapter 2 that traditionally supply chain activities have often been

measured, and therefore managed, in isolation. The contention implicit in this statement

is that fragmented approaches to measurement result in fragmented approaches to

management, and that performance measurement provides a rational basis for any

meaningful continuous improvement process. The author contends that for a definition

of SCM it is not essential that the specific notion of continuous improvement is

explicitly referred to. In section 2.14.5, the author made the point that, whilst the Four

Fundamentals is primarily a comprehensive definitional construct, it does go beyond a

purely definitional focus. Extending the construct further by incorporating concepts

such as continuous improvement would take if further away from the intended

definitional focus.

The strategic approach that involves the acquisition of successful supply chains by firms

in sectors in which they wish to develop a presence was raised by one FG2 participant.

As noted in section 5.2.2 (above) this reinforces the key element of Fundamental Two

that “supply chains, not companies, compete”.

Fundamental Three

In relation to Fundamental Three the approach known as sales and operations planning

(S&OP) was raised by FG3. As noted in section 5.2.3, the focus group itself concluded

that, whilst this terminology was not explicitly used in the Four Fundamentals, S&OP

was implicitly captured in the construct. The point is that supply chains have to properly

planned with a strong focus on synchronising supply and demand and that this can only

be achieved by planning sales and operational processes in an integrated way. These

points are probably most closely associated with Fundamental Three but also find

expression elsewhere in the author’s construct.

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Fundamental Four

No issues specifically relevant to Fundamental Four that are not explicitly captured by

the construct were raised by participants in any of the three focus groups.

Other Issues

As noted in section 3.7.5, following the author’s presentation of the Four Fundamentals

construct, participants were asked to consider and comment on the validity of the

construct in general terms, as well as on its specific applicability in their own sectors.

These points, as discussed in earlier sections, are summarised as part of Figure 5.8

(above). A number of very similar issues emerged on a within-group and across-group

basis. Such issues are grouped in Figure 5.8.

Generic definition, One size fits all, Service supply chains, Language. It was widely

agreed that the development of a generic definition (i.e. one that is relevant in every

detail to every firm in every sector) is a difficult task. The reality is that different drivers

and strategic imperatives exist in every firm. Nonetheless, all participants agreed that all

components of the construct were relevant to a greater or lesser extent in their

organisations. However, there was a widely held view that the basic construct would

need to be adapted somewhat in each individual company and sector to reflect specific

concerns. One particular example of this that emerged strongly in FG3 and, albeit to a

lesser extent, in FG1 and FG2, was the concern that the construct was heavily based on

product supply chains. It was felt that the detail would need to be modified for the

construct to find more resonance in service-oriented organisations. Related to this was a

concern that the construct made extensive use of language and terminology associated

with manufacturing industry. The author accepts these points and, in particular, the view

that the basic construct needs to be adapted somewhat by each individual company and

sector to reflect specific drivers and strategic imperatives.

Customer focus. Despite the fact that the concept of customer service “setting the spec”

is a major element of Fundamental One, FG1 was strongly of the view that the concept

needs to further emphasise the importance of customer focus. However, the author’s

reflection on this issue is that it is one of emphasis rather than of substance. This issue

of emphasis may be related to the use of the word “supply” in the phrase “SCM” with

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its implication of a focus on the buy side of the supply chain and an attendant supply-

driven “push” orientation, i.e. rather than a demand-focused “pull” orientation.

Leadership, Buy-in, People and senior management. The role of leadership and

senior management in developing appropriate supply chain strategies was emphasised

in the discussions of FG1 and FG3, as was the related issue of employee involvement

and “buy-in” to the supply chain change and improvement process. Overall, there was

broad agreement that these people-related issues should be at the core of any

worthwhile definition of SCM. The author agrees with these sentiments and would

argue that the people dimension is explicitly dealt with in Fundamental Four (see

section 2.11.5). On reflection, the author’s view is that the limited time available to him

during each focus group session to provide an overview of the Four Fundamentals

(about 20 minutes in total – see Table 3.4) did not, by definition, allow the construct to

be fully explained in every detail and this to a large extent accounts for this particular

issue. Furthermore, many of the issues raised by FG1 and FG3 regarding leadership and

people issues digress from the purely definitional focus that is the author’s primary

emphasis.

Dynamic, Risk and uncertainty. One FG2 participant raised the need for supply

chains be dynamic, i.e. highly responsive to the changing business environment and to

changes in customer requirements. As noted in section 5.2.2, some participants felt that

this need for dynamism was implicit in the Four Fundamentals (in particular in

Fundamental One with its emphasis on customer service). In any case (and again as

noted in section 5.2.2) a consensus emerged that dynamism in this context was more an

issue of good supply chain practice rather than something that needed to be explicitly

captured in a definitional construct. Several FG2 participants raised the related issue of

risk, uncertainty and resilience in a supply chain context, with a general consensus that

the current economic environment is creating new challenges for individuals. In any

case, the overall view was that these pressures did not impact directly on how SCM

should be defined. The author’s reflection on these issues is that they will inevitably

arise in any discussion of management practice in an economic climate that is

characterised by turbulence, volatility and uncertainty but that the issues that arise do

not need to be specifically reflected in an SCM definitional construct.

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Pre-requisite. As noted in section 5.2.3, the specific question as to whether high levels

of internal integration were a pre-requisite for external integration was raised by one

participant during FG3. As further noted in section 5.2.3, whilst there was general

agreement on a conceptual level about this point, participants struggled to illustrate this

opinion with concrete practical examples. As noted in 2.9.2, this point is also analogous

to the supply chain orientation (SCO) approach of Mentzer et al. (2001) in the sense that

SCO at firm level, as manifested in high levels of internal integration, could be regarded

as a prerequisite for SCM, as manifested in high levels of external integration. In any

case, and as with the “dynamic, risk and uncertainty” category, this is more an issue of

good supply chain practice rather than something that needed to be explicitly captured

in a definitional construct.

5.5 Concluding Comments

It is important not to lose sight of the role of the focus group method, as set out in this

Chapter, in answering RQ1. Notwithstanding the difficulties associated with the

transferability of findings from a relatively small sample (i.e. 28 individuals in total),

the author’s analysis suggests that a thorough understanding of the main elements of

SCM is evident from the focus group sessions. The fact that participants were chosen

from a range of different industry sectors and backgrounds, as well as being diverse

from nationality and gender perspectives, enhances the author’s confidence in this

assertion.

Section 5.4.3 relates to the use of the focus group method in refining the Four

Fundamentals construct. The approach of all 28 informants across the three focus

groups is broadly in line with the construct. This gives the author further confidence that

it provides a rational basis for exploring in more detail the research questions set out in

Chapter 2, in particular RQ2. The major refinement to the construct as a result of the

focus group research involves adding a specific SCM objective in relation to

environmental sustainability. The focus group work has also highlighted the difficulty

of developing an SCM definition that is applicable to all firms in all sectors – the need

for the basic construct to be adapted somewhat by each individual company and sector

to reflect specific drivers and strategic imperatives has been emphasised.

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RQ2 asks “What is the level of adoption of SCM”. Chapter 6 goes on to describe how

this question was answered in phase III of the author’s research. This uses a

questionnaire survey that adopts the refined Four Fundamentals construct as its basis.

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CHAPTER 6

PHASE III: QUESTIONNAIRE SURVEY

6.1 Background

As discussed in Chapter 3, a review of the methodological approaches used in previous

empirical research in the SCM field reveals a strong emphasis on the use of single-

method approaches with the great majority of studies making exclusive use of

questionnaire surveys. The advantages of survey research are such that it will play a key

role in the current research.

Notwithstanding some of the limitations associated with their use, the prime advantage

of surveys is their efficiency in terms of speed and cost in generating large amounts of

data that can be subjected to statistical analysis (Snow and Thomas, 1994). Moreover,

as surveys are particularly useful when the research goal is to provide a description of

the incidence or prevalence of a phenomenon (Yin, 1994), they represent an appropriate

method of answering RQ2. This question, with its focus on assessing the level of

adoption of SCM is – by definition – largely quantitative in nature. The survey also

provides the opportunity to generate insights into the other three RQs. As part of this

work, a survey is also an effective way of deductively testing the refined definitional

construct (the Four Fundamentals).

The structure of this chapter is shown in Figure 6.1 (below).


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The following sections describe the collection (section 6.2), presentation (section 6.3)

and analysis (section 6.4) of survey data. The chapter concludes by making some

general points by way of summary (section 6.5).

6.2 Data Collection

In line with the sampling design described in section 3.8.2, the the survey was

administered over a four week period during late July and early August of 2011 to just

over 1,000 sample firms. This comprised 1,000 firms across the 20 selected NACE

categories, as well as a small number sent to “Healthcare” organisations – part of NACE

Q (see section 3.8.2). In line with the stratified sampling approach adopted the number

of firms contacted was as shown in Table 6.1 below.

Table 6.1: Final Sample

As noted earlier, the sampling frame used was based on NITL’s database which is

regularly refined with a view to ensuring that email addresses are as up-to-date and

accurate as possible. Nonetheless, a number of the emails were returned undelivered. In

such cases, an alternative email address was selected at random from the sampling

frame as a replacement and an additional email sent early in week three of the survey.

Table 6.2 shows the number of emails returned to the author undelivered during these

two phases of the study (“Returned Undelivered 1” and “Returned Undelivered 2”

respectively).

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Table 6.2: Emails Returned Undelivered

Six of the 21 strata accounted for all 18 returned emails meaning that the survey reached

just under 1,000 firms (992, i.e. 1,010 – 18). During the fourth and final week that the

survey was live the author sent a reminder to all email addresses in the sample in a final

effort to boost the response rate.

Figure 6.2 shows the response pattern over the four weeks (i.e. 20 working days) of the

study. The three peaks coincide with the three main phases described above. There was

a strong level of response after the initial mailing – Peak 1 – with half of the final

number of usable responses received during the first five working days. Peak 2

coincides with the mailing of the replacement firms for those emails that were returned

undelivered with Peak 3 representing a response to the final reminder.

Figure 6.2: Survey Response Pattern37

37 Note that some responses were received prior to the survey “go-live” date. These were the small number of usable responses – nine in total – from the 20 surveyed during the formal pre-test (see section 3.8.7).

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The final number of usable responses was 132 giving a response rate of 13.1%. This is

in line with modal response rates in previous empirical studies reviewed by the author

(see Appendix 7) in which the majority of response rates were less than 20% with rates

between 10 and 20% (39% of the total) being most common.

Figure 6.3 shows how the 132 responses break down by sector and Table 6.3 shows

response rates by sector. The latter shows significant differences between sectors with

very high response rates in certain sectors (for example, 80% in “computer, electronic,

optical and electrical equipment” and over 60% in “chemicals and pharmaceuticals”)

and correspondingly low response rates in others (for example, less than 10% in “wood

and wood products, except furniture”, “wholesale trade” and “retail trade”).

The Irish Central Statistics Office (CSO) distinguishes between “modern” and

“traditional” industries. The former includes, for example, NACE 20, 21, 26 and 27.

Analysis of the responses received shows that these sectors had by far the highest

response rates (61.5% for NACE 20, 21 and 80% for NACE 26, 27). In order to detect

non-response bias, a number of non-respondents were contacted and there was no evidence

of any significant non-response bias. A number of late respondents were also compared to

earlier respondents – on the basis that late respondents are likely to share certain

characteristics with non-respondents (see section 3.8.8) – and again no evidence of any

significant differences was found.

Figure 6.3: Responses by Sector

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Table 6.3: Response Rates by Sector

6.3 Data Presentation

6.3.1 Questionnaire Section 1: Background

The first part of this section comprised three open questions:

• What is meant by the term “supply chain”?

• What is meant by the term “supply chain management (SCM)”?

• What is meant by the term “logistics”?

Usable responses were received from all respondents with a wide variety of words and

phrases used to define the three terms.

Responses to question 4 were provided by all but one respondent with the great majority

(87.8%) regarding logistics as part of SCM (see Figure 6.4).

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Figure 6.4: Relationship Between SCM and Logistics

The next question used a five-point Likert scale to solicit the reaction of respondents to

the statement: the language and terminology used to define SCM contributes to

confusion in understanding. Of the 131 that responded, a clear majority (57.5%) either

“agreed” or “agreed strongly” with this statement, while very few (1.5%) “disagreed

strongly” (see Figure 6.5).

Figure 6.5: Language and Terminology Used to Define SCM

The final question in the first section of the questionnaire asked whether single-sentence

definitions were of value. Figure 6.6 shows a breakdown of the 131 responses received.

Figure 6.6: Value of Single-Sentence Definitions of SCM

This indicates that more respondents regard such definitions of value than do not

(45.0% compared with 35.9%) but that a significant number (19.1%) have no opinion.

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6.3.2 Questionnaire Section 2: SCM Objectives (Fundamental One)

The nine questions in this section relate to SCM objectives – specifically: background,

customer service, total supply chain cost and investment, and the service/cost

conundrum.

Background

Question 7 asked if specific SCM objectives were formulated. As shown in Figure 6.7,

of the 132 responses received a clear majority (59.1%) responded in the affirmative.

Figure 6.7: Formulation of Specific SCM Objectives

Where specific SCM objectives are formulated they relate to the areas shown in Figure

6.8. In line with classical approaches to SCM the majority of respondents focus on

customer service (70.5%) and cost (67.4%) objectives.

Figure 6.8: Focus of SCM Objectives

Customer Service

Question 8 asked respondents to rank customer service, price and product quality in

order of importance (1 = most important; 3 = least important) to customers in markets

served by their companies. Table 6.4 shows the number and percentage of firms that

ranked the three factors. Of most significance is the relative importance attached to each

of the factors with “Importance” varying from 1 to 3 and calculated as the mean rank of

the modality. Interestingly, customer service is ranked as the most important (1.72) and

price as the least (2.22).

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Table 6.4: Relative Importance of Customer Service, Price and Product Quality

Question 9 asked if customer service audits were used to understand customer

expectations and the performance of competitors. As shown in Figure 6.9 the majority

(62.1%) indicated that they do use such audits.

Figure 6.9: Use of Customer Service Audits

Question 10 asked which elements of customer service were measured in respondents’

organizations. Figure 6.10 shows that on-time delivery (84.1%) and product availability

(78.0%) are most commonly measured. They are followed by length (57.6%) and

consistency (53.0%) of order cycle time, with documentation accuracy (40.2%) and

information request responsiveness (37.0%) lagging behind.

Figure 6.10: Elements of Customer Service Measured

Question 11 then used a five-point Likert scale to solicit the reaction of respondents to

the statement: understanding customer service sets the specification for SCM/supply

chain design. The responses are shown in Figure 6.11 and indicate that the great

majority (81.8%) either “agree” or “agree strongly” with this assertion with few

demurring (3%).

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Figure 6.11: Customer Service and SCM/Supply Chain Design

Total Supply Chain Cost and Investment

Question 12 asked if firms measured “total supply chain cost” and Figure 6.12 shows

the responses. A minority of respondents (22.7%) answered in the affirmative with a

significant number in the “don’t know/no opinion” category.

Figure 6.12: Measuring “Total Supply Chain Cost”

Figure 6.13 shows the costing methodologies employed in the respondents’ firms. The

great majority use formal approaches with activity-based costing (ABC) the most

widely used (42.4%). The only usable response amongst those who answered “other”

was “cost-to-serve”.

Figure 6.13: Supply Chain Costing Methodologies

The Service/Cost Conundrum

The final question is this section used a five-point Likert scale to solicit the reaction of

respondents to a statement: cost/investment optimisation and customer service

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optimisation are mutually exclusive. The responses are shown in Figure 6.14 and a clear

majority (53.8%) either “disagreed” or “disagreed strongly”.

Figure 6.14: The Service/Cost Conundrum

6.3.3 Questionnaire Section 3: Supply Chain Integration (Fundamental Two)

The six questions in this section relate to background, internal integration, external

integration and performance measurement.

Background

The first question in relation to integration used a five-point Likert scale to solicit the

reaction of respondents to a statement: SCM is fundamentally concerned with

integration of supply chain activities. The responses are shown in Figure 6.15 with the

great majority of respondents (82.5%) in either the “agree strongly” or “agree”

categories.

Figure 6.15: Importance of Integration in SCM

Question 16 then asked respondents to rank the four levels of integration posited by

Fawcett and Magnan (2002) in order of importance (1 = most important; 4 = least

important). Table 6.5 shows the number and percentage of firms that ranked the four

levels. Of most significance is the relative importance attached to each of the factors

with “Importance” varying from 1 to 4 and calculated as the mean rank of the modality.

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Backward integration (i.e. with suppliers) is regarded as the most important (2.16) with

internal regarded as least important (2.79).

Table 6.5: Importance of Different Levels of Integration

Internal Integration

The only question that related specifically to internal integration used a five-point Likert

scale to assess the extent to which the internal supply chain activities in respondents’

firms were integrated. The responses are shown in Figure 6.16 with the great majority

of respondents indicating that internal activities were either “highly integrated” or

“somewhat integrated”.

Figure 6.16: Extent of Internal Integration

External Integration

The next two questions in this part of the questionnaire used the same five-point Likert

scale as used in the previous question to assess the level of integration with customers

and suppliers respectively. The responses are shown in Figures 6.17 and 6.18. As with

internal integration, the great majority of respondents indicated that their firms’

activities were either “highly integrated” or “somewhat integrated” with those of their

customers and suppliers respectively.

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Figure 6.17: Extent of Integration with Customers

Figure 6.18: Extent of Integration with Suppliers

Performance Measurement

The final question in this section asked respondents to indicate what supply chain KPIs

are used in their organizations. As might be expected the 103 responses received varied

greatly in terms of the detail provided but suggested that a wide range of KPIs are in

use.

6.3.4 Questionnaire Section 4: Supply Chain Flow Management (Fundamental

Three)

The questions in this section relate to material, money and information flows. The first

three questions used a five-point Likert scale to assess how well these flows were

managed. The responses are as shown in Figure 6.19 with a small minority indicating

that material (5.3%), financial (9.1%) and information (9.1%) flows were either

“poorly” or “very poorly” managed.

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Figure 6.19: Flow Management

Question 24 then asked about the ICT tools used to support the management of supply

chain information flows. As shown in Figure 6.20, the majority of firms indicated that

they used enterprise solutions (i.e. ERP) with significant numbers using WMS (43.9%),

MRP (40.9%), TMS (31.8%) and manufacturing planning systems (28%).

Figure 6.20: ICT Tools Used

6.3.5 Questionnaire Section 5: Supply Chain Relationships (Fundamental Four)

Three questions that are concerned with supply chain relationships adopted a five-point

Likert scale to assess the strength of relationships internally, as well as with external

customers and suppliers. As shown in Figure 6.21, in all three cases the majority of

respondents assessed the relationships as “strong” (58.3%, 53.8% and 53.8%

respectively).

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Figure 6.21: Nature and Extent of Relationships

6.3.6 Questionnaire Section 6: Supply Chain Improvement

Three questions in relation to improvement initiatives were asked in this part of the

questionnaire.

Question 28 asked if any major supply chain improvement initiatives had been

implemented in the last two years and question 29 if any such initiatives were planned

in the next two years (see Figure 6.22).

Figure 6.22: Major Supply Chain Improvement Initiatives

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The final question asked if there are any policy initiatives that could be adopted to

facilitate the wider adoption of SCM. A wide range of suggestions was evident across

the 28 usable responses.

6.3.7 Respondent Information

The number of responses received by sector (i.e. NACE category) was discussed in

section 6.2. Figure 6.23 shows information about the size of responding companies by

number of employees, annual turnover and balance sheet total. As a result of the large

proportion of “don’t know” responses in relation to balance sheet total, it is impossible

to reliably categorise all firms using the EU definition of firm size. For analysis

purposes, firm size will therefore be based on number of employees (as shown in Figure

6.23(a)). This results in slightly fewer firms being in the “large” and “medium”

categories and proportionately more being in the “small” category than would be the

case using the EU definition. This is because, in addition to the staff headcount ceilings,

the size an enterprise in the EU taxonomy is based on either the turnover ceiling or the

balance sheet ceiling, but not necessarily both. The high proportion of responses from

SMEs is encouraging given the well documented difficulties in getting responses from

smaller firms (see, for example, Harzing, 2000).

Figure 6.23: Size of Respondents’ Firms

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Figure 6.24 shows the ownership of respondents’ firms with over half being

indigenously owned companies. Figure 6.25 shows the location of the company’s HQ

for the 58 multinational firms.

Figure 6.24: Ownership of Respondents’ Firms

Figure 6.25: Headquarters of Multinational Firms

Finally in terms of demographics, respondents were asked about their professional

backgrounds. Figure 6.26 shows the responses provided with “end-to-end SCM” the

most commonly indicated response.

Figure 6.26: Respondent Professional Background

A detailed analysis of the linkages between various demographic data is shown in

Appendix 13. This focuses mainly on the demographic factors used in the data analysis

in section 6.4 – sector, firm size, firm ownership and respondent background. Some of

the main findings from this analysis are:

• Firm size varies significantly across sectors with, for example, a large number

of small firms in the retail trade (with a proportionately small number of large

firms);

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• Firm ownership varies significantly across sectors with a strong multinational

presence in certain sectors (e.g. computers and electronics);

• The way in which respondents describe their professional backgrounds varies

significantly across sectors (for example, “end-to-end SCM” is very prevalent

in technology-oriented sectors such as “chemicals and pharmaceuticals”,

“computer, electronic, optical and electrical” and “information and

communications”); and,

• The majority of small firms are indigenous while the majority of large firms are

local operations of multinationals.

6.3.8 Reflection and Summary

A number of points are worth highlighting at this stage. Firstly, the clear majority of

respondents in agreement with the idea that the language and terminology used to define

SCM contributes to confusion, backs up the author’s contention that a new definitional

construct is desirable. Secondly, the significant number of respondents who are

unconvinced by the value of single-sentence definitions of SCM adds weight to the

author’s contention that any such construct needs “to concisely, yet comprehensively,

define the essence of SCM” (see section 2.7). Thirdly, the fact that almost 90% of

respondents describe themselves as “unionist” in the Larson and Halldorsson (2004)

taxonomy, is in line with the broad thrust of the author’s proposed definition (i.e. the

Four Fundamentals). Fourthly, the significant number of firms formulating SCM

objectives that relate specifically to environmental sustainability reinforces the author’s

refinement of the definitional construct (i.e. the addition of this dimension to the

traditional service/cost orientation) based on the focus group work described in Chapter

5.

An initial reflection on and analysis of the data presented in this section points to a

mixed picture in relation to SCM adoption by firms in Ireland. These and other issues

are explored in more detail based on a more thorough analysis of the data in the

following section (section 6.4).

6.4 Data Analysis

6.4.1 Questionnaire Section 1: Background

The first three questions were open questions:

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• What is meant by the term “supply chain”?

• What is meant by the term “supply chain management (SCM)”?

• What is meant by the term “logistics”?

Usable responses were received from the majority of respondents with a wide variety of

words and phrases used to define the three terms.

What is meant by the term “supply chain”?

An initial content analysis of the responses to this question was carried out by looking at

the frequency of occurrence of particular words and phrases. The software provides a

simple list of the most frequently occurring words. This was carefully analysed by the

author, paying particular attention to:

• ignoring unimportant words (such as definite and indefinite articles, prepositions

and conjunctions);

• amalgamating the singular and plural forms of words; and,

• linking words that are effectively synonyms for analysis purposes (e.g. “make”,

“manufacture” and “produce”).

Despite the relatively unscientific nature of this analysis, the 25 most frequently

occurring words shown in the word cloud in Figure 6.27 provides some insights into

how respondents define the term “supply chain”. Interestingly, the two most frequently

used words were “customer” and “supplier” with the former used by 50% more

respondents than the latter. This indicates a higher prevalence of customer-focussed (or

“pull”) – as opposed to supplier-focussed (or “push”) – orientations among respondents.

Figure 6.27: Words Used to Define “Supply Chain”

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Further analysis of the 120 usable responses was based primarily on the distinction

between internal (i.e. intra-firm) and external (i.e. inter-firm) chains as set out in section

2.9. The primary emphasis of the responses is shown in Figure 6.28. Almost two thirds

of respondents defined the supply chain as being inter-firm (i.e. external). In this

context, several respondents used the term “distribution channel” with other phrases

such as “network”, “pathway” and “pipeline” also being used. Several respondents

specified the types of firms that typically comprise an external chain (e.g.

“manufacturer”, “wholesaler”, “retailer”, etc.).

Of those respondents who indicated that the supply chain is primarily intra-firm (i.e.

internal), several specified the functions that comprise such a chain (e.g. purchasing,

manufacturing, transport, etc.). As indicated in Figure 6.28 a number of respondents

alluded to both internal and external chains and specified the distinction between them.

For example, one respondent from the electronics sector stated:

“(i) A group of companies ultimately delivering a product to the final consumer;

and, (ii) A ‘chain’ of internal functions (e.g. production, logistics, etc.) working

together”.

Figure 6.28: Supply Chain Definitions

A small number of respondents stated that the supply chain was essentially the suppliers

that they interacted with. Interestingly, all such responses came from firms in either the

retail or motor sectors. One typical response from a retailer was: “The events and

activities that result in product being delivered to us”. Another small group of

respondents provided definitions of the supply chain that adopted a product life cycle

orientation with one typical definition stating that the “supply chain incorporates all the

activities which are involved in bringing a product from the stage of inception to the

234

stage of delivery to the end user”. The responses in the “other” category provided

relatively narrow definitions of the supply chain with one response from the transport

sector stating that it is “a new word for transport and logistics”.

Perhaps inevitably, a number of the responses tended to describe SCM as opposed to the

supply chain itself. For example, one respondent stated that: “supply chain is an end to

end process responsible for delivering a product/service in a satisfactory manner to the

consumer”. In most such cases, the answers provided by respondents to question 2 –

What is meant by the term “supply chain management (SCM)”? – referred back to the

response to question 1.

What is meant by the term “supply chain management (SCM)”?

As with the previous question, an initial content analysis of the responses to this

question was carried out by looking at the frequency of occurrence of particular words

and phrases and the 25 most frequently occurring words are shown in Figure 6.29.

Figure 6.29: Words Used to Define “Supply Chain Management”

As with the previous question, the word “customer” occurs most frequently. Not

surprisingly, the majority of the words/phrases are identical to those used to define

“supply chain”. The new words/phrases that are used by respondents include:

“finance/cash/money”, as well as “cost” and “value”; “right”, reflecting the classic

“seven rights” approach to defining logistics/SCM (see, for example, Lambert and

Stock (1992)) including right “time”; “relationship”, as well as “holistic” and

“integration”; “internal”; and “strategic”.

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Further analysis of the 131 usable responses was based primarily on categorising

responses in relation to the author’s Four Fundamentals construct. All responses were

assigned one or more of the numbers, 1, 2, 3 and 4, based on the emphasis of the

definition and the words/phrases used by respondents. For example, one response was:

“SCM is incorporated to maintain effective integration throughout the whole

channel of distribution while facilitating constant and accurate information to

everyone involved in the transfer of materials, information, and money.”

The use of the word “integration” is in line with Fundamental Two and there is also

specific reference to materials, information and money flows as set out in Fundamental

Three. This response is, therefore, coded “2, 3”. A small number of responses were

impossible to categorise in this manner. Figure 6.30 shows how the words/phrases used

align with the Four Fundamentals.

Figure 6.30: Supply Chain Management Definitions

Almost three quarters of respondents alluded to the need for different links in the supply

chain to work together properly in line with the SCI concept articulated in Fundamental

Two. As shown in Figure 6.29, the use of words such as “process”, “network”, “link”,

“holistic” and (perhaps most importantly) “integration” is in line with this emphasis.

Almost 30% of respondents made reference to supply chain objectives and, more

specifically, the need to optimise customer service and/or cost performance (as outlined

in Fundamental One). Approximately one quarter of respondents alluded to the

management of flows as set out in Fundamental Three. Just 13.7% of respondents made

specific reference to the notion of relationships between actors in the supply chain.

Most respondents in the “other” category adopted a narrow view of SCM with several –

again mainly from the retail and motor sectors – stating that SCM was simply about the

management of suppliers and the supply base.

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What is meant by the term “logistics”?

As with the previous questions, an initial content analysis of the responses to this

question was carried out by looking at the frequency of occurrence of particular words

and phrases and the 25 most frequently occurring words are shown in Figure 3.31.

Figure 6.31: Words Used to Define “Logistics”

The concepts of “movement” and “transport” of “materials” through the chain (i.e. from

“(point of) origin” to “(point of) consumption”), as well as “storage/warehousing”, are

prevalent. Other words associated specifically with the “move” and “store” links in the

supply chain (e.g. “distribution” and “inventory/stock”) also appear. Again, the majority

of the words/phrases are identical to those used to define “supply chain” and “supply

chain management”. The new words/phrases that are used by respondents include

“effective” and “efficient” indicating that respondents regard logistics as being

fundamentally concerned with the effective and efficient movement and storage of

product.

Further analysis of the 125 usable responses was based on the primary emphasis of

respondents and is shown in Figure 6.32. In line with Figure 6.31, the great majority

indicated that logistics is primarily concerned with transportation (i.e. “move”) and/or

transportation and storage (i.e. “move/store”) in the supply chain. 9.6% of respondents

referred to “material flows” and their management in a supply chain context, while 12%

took a broader view and alluded to the management of a wider set of flows. One

example of the latter is a respondent who defined logistics as “the management of the

flow of information, product and finance”. A number of respondents specifically noted

that logistics was concerned with operational issues associated with the “execution” of

the supply chain; one respondent, for example, stated that logistics is “making sure that

237

the supply chain is working properly – the grease that lubricates the supply chain”. Four

respondents felt that logistics was the same as SCM and another four alluded to the

“seven rights” of logistics/SCM or variants thereof. Most of the respondents in the

“other” category took a broader view of logistics; one respondent, for example, defined

logistics as “a channel of the supply chain which adds the value of time and place

utility”.

Figure 6.32: Logistics Definitions

Relationship between SCM and Logistics

As shown earlier in Figure 6.4, the great majority of respondents (87.8%) regard

logistics as part of SCM. The data were analysed to test for any differences based on: (i)

sector; (ii) firm size; (iii) firm ownership; and, (iv) respondent background.

The χ2 test indicates that no significant differences exist (NS) by sector. Analysis of the

data by company size based on the number of employees using the χ2 test indicates a

slightly significant dependence (LS). This is accounted for by the relatively large

number of small firms (i.e. between 10 and 50 employees) who deemed SCM to be part

of logistics (two firms) or SCM to be a new term for logistics (seven firms).

The χ2 test indicates that no significant differences exist between indigenous and

multinational firms. Figure 6.33 shows the data based on the professional background of

respondents with the χ2 test suggesting that highly significant differences exist (VS).

This is largely accounted for by two factors. Firstly, the only two respondents who

suggested that SCM is part of logistics were both from a customer service background.

Secondly, three respondents from a transport management background indicated that

SCM was a new name for logistics. This represents a relatively high proportion of: (i)

all respondents who responded thus (30%); and, (ii) the total number of respondents

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describing their professional background as transport management (37.5%). This can be

seen in the factor map of the cross tabulation (see Figure 6.34) that shows clear linkages

between: (i) customer service and “SCM is part of logistics”; (ii) transport management

and “SCM is a new term for logistics”; and, (iii) warehouse management and “Other”.

p = <0.1%<0.1%<0.1%<0.1% ; chi2 = 52.7752.7752.7752.77 ; dof = 18181818 (VSVSVSVS) Dependence is highly significant.

Figure 6.33: Relationships Between SCM and Logistics by Respondent Background

Figure 6.34: Factor Map - Relationships Between SCM and Logistics by Respondent

Background

Language and Terminology Used to Define SCM

As shown earlier in Figure 6.5, a clear majority (57.5%) either “agreed” or “agreed

strongly” with the view that the language and terminology used to define SCM

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contributes to confusion in understanding, while very few (1.5%) “disagreed strongly”.

The data were analysed to test for any differences based on: (i) sector; (ii) firm size; (iii)

firm ownership; and, (iv) respondent background. In each case the χ

2 tests suggest that

no significant differences exist (NS).

Value of Single-Sentence Definitions

Figure 6.6 indicates that more respondents regard single-sentence definitions of value

than do not (45.0% compared with 35.9%) but that a significant number (19.1%) have

no opinion. The data were analysed to test for any differences based on: (i) sector; (ii)

firm size; (iii) firm ownership; and, (iv) respondent background. The χ2 tests suggest

that highly significant differences exist in each case (VS).

Figure 6.35 shows the data by sector. The high level of significance is largely accounted

for by three factors. Firstly, five of the seven respondents (i.e. over 70%) from the

motor trades sector indicated “no opinion/don’t know”; this compares with 18.9%

across all respondents. Secondly, just four of the 26 respondents (i.e. 15.4%) from the

retail trades sector answered in the affirmative; this compares with 45.5% across all

respondents. Thirdly, in direct contrast to the retail trades sector all but one respondent

(i.e. over 90%) from the “manufacture of computer, optical and electrical equipment”

sector answered “yes” compared with the 45% across all respondents.

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p = 0.2%0.2%0.2%0.2% ; chi2 = 70.3970.3970.3970.39 ; dof = 40404040 (VSVSVSVS) Dependence is highly significant.

Figure 6.35: Value of Single-Sentence Definitions by Sector

Figure 6.36 shows the data by company size based on the number of employees. The

high level of significance is mainly accounted for by the “no opinion/don’t know”

responses with a high number of small firms and just a single large firm in this category.

The relatively large number of large firms that responded “yes” (i.e. 63.3%) is also

significant. This can be seen in the factor map of the cross tabulation in Figure 6.37

(below).

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Figure 6.36: Value of Single-Sentence Definitions by Firm Size

Figure 6.37: Factor Map – Value of Single-Sentence Definitions by Firm Size

Figure 6.38 shows the data by ownership. The high level of significance is due to the

relatively high number of indigenous (and “other”) firms (and the proportionately low

number of multinationals) answering “no opinion/don’t know”, as well as to the

relatively low number of indigenous firms (and the proportionately high number of

multinationals) answering “yes”. The factor map in Figure 6.39 again shows this.

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Figure 6.38: Value of Single-Sentence Definitions by Firm Ownership

Figure 6.39: Factor Map – Value of Single-Sentence Definitions by Ownership Finally in relation to the value of single-sentence definitions, Figure 6.40 shows the data

by respondent background. As can be seen in the factor map in Figure 6.41, the main

contributors to the high significance are the relatively high number of customer service

respondents (and the proportionately low number of end-to-end SCM respondents)

answering “no opinion/don’t know”. The relatively large number of end-to-end SCM

respondents (and the proportionately low number of both purchasing and customer

service respondents) answering “yes” is also significant.

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Figure 6.40: Value of Single-Sentence Definitions by Respondent Background

Figure 6.41: Factor Map – Value of Single-Sentence Definitions by Respondent Background

Questionnaire Section 1 (Background): Overall

Table 6.6 summarises the variables tested in section 1 of the questionnaire in relation to

sector, firm size, firm ownership and respondent background.

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Sector Firm Size Firm Ownership

Respondent Background

Relationship between SCM and Logistics

NS LS NS VS

Language and Terminology Used to Define SCM

NS NS NS NS

Value of Single-Sentence Definitions

VS VS VS VS

Table 6.6: Questionnaire Section 1 – Significance of Dependencies

The highly significant differences across the demographics in relation to the value of

single-sentence definitions is somewhat distorted by the large number of “don’t

know/no opinion” responses. Nonetheless, the “don’t know/no opinion” responses were

more likely in “traditional” (e.g. motor trades) than in “modern” (e.g. electronic,

computer, optical and electrical) sectors (as defined by the CSO), and more likely in

small indigenous firms than in larger multinationals. In other words, there is a contrast

between the relative clarity of responses from the large multinational firms that operate

predominantly in the “modern” industries and the ambiguity and/or uncertainty of

responses from the smaller indigenous firms that operate mainly in “traditional” sectors.

In terms of defining “supply chain” and “supply chain management”, the prevalence of

the word “customer” suggests that a strong customer (or pull) orientation exists with

almost two thirds of respondents defining the supply chain as being inter-firm (i.e.

external). As noted earlier, there is some evidence that the supply chain is quite

narrowly defined and understood in certain sectors (notably the retail and motor trades).

There is also appears to be a limited emphasis amongst respondents on the product life

cycle orientation to the supply chain despite the prevalence of this concept in the

literature in recent years (given – as articulated by Khan and Creazza (2009, p. 301) –

“the growing realisation that the supply chain begins on the drawing board”). The

“unionist-intersectionist” orientation of the Four Fundamentals construct is in line with

the majority of definitions provided by respondents. A sizable majority clearly

articulates a “unionist” view but with a significant minority specifically noting that

logistics is concerned with operational issues associated with the execution of the

supply chain (i.e. a largely “intersectionist” perspective).

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6.4.2 Questionnaire Section 2: SCM Objectives (Fundamental One)

The ten questions in this section relate to SCM objectives – specifically: background,

customer service, total supply chain cost and investment, and the service/cost

conundrum.

Background

In relation to formulation of SCM objectives, the χ2 test indicates that no significant

differences exist between sectors (NS). However, Figure 6.42 shows that highly

significant differences do exist in the area between firms of different sizes (VS). As

shown in the factor map in Figure 6.43 this is mainly accounted for by the fact that a

large proportion of large and medium-sized firms formulate SCM objectives while a

proportionately large number of small firms do not. A similar situation exists in relation

to company ownership with the highly significant difference between multinational

firms and their indigenous counterparts (VS) suggesting that the former are more likely

to formulate such objectives than the latter (see Figure 6.44). Again the factor map in

Figure 6.45 shows this very clearly. Figure 6.46 suggests that highly significant

differences exist between respondents from different backgrounds (VS). This is mainly

accounted for by: (i) a large proportion of end-to-end SCM respondents answering in

the affirmative (with none answering “don’t know”); (ii) a large proportion of

warehouse management respondents answering “sometimes”; (iii) a large proportion of

transport management respondents answering “don’t know”; and, (iv) a relatively large

number of purchasing respondents also answering “don’t know”. The factor map in

Figure 6.47 shows this.

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Figure 6.42: Formulation of SCM Objectives by Firm Size

Figure 6.43: Factor Map – Formulation of SCM Objectives by Firm Size

p = 0.1%0.1%0.1%0.1% ; chi2 = 22,3822,3822,3822,38 ; dof = 6666 (VSVSVSVS) Dependence is highly significant.

Figure 6.44: Formulation of SCM Objectives by Firm Ownership

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Figure 6.45: Factor Map – Formulation of SCM Objectives by Firm Ownership

p = 0.4%0.4%0.4%0.4% ; chi2 = 38,0438,0438,0438,04 ; dof = 18181818 (VSVSVSVS) Dependence is highly significant.

Figure 6.46: Formulation of SCM Objectives by Respondent Background

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Figure 6.47: Factor Map – Formulation of SCM Objectives by Respondent Background

In terms of the types of SCM objectives formulated by firms, the χ2 tests indicate that no

significant differences exist by sector, firm size, firm ownership or respondent

background (NS). Of the ten respondents who answered “other” some formulate quite

narrow SCM objectives (e.g. “raw material costs”) while others made quite general

statements such as “supply chain visibility” and “flexibility”.

Customer Service

In relation to how respondents rank customer service relative to price and product

quality, the χ2 tests indicate the no significant differences exist by sector, firm size, firm

ownership or respondent background (NS).

The χ2 test indicates that no significant differences exist between sectors (NS) in terms

of the use of customer service audits. The χ2 tests do, however, suggest that significant

differences exist based on firm size (VS – see Figure 6.48) and – albeit to a much lesser

extent – ownership (LS). The highly significant dependence in the case of firm size is

due to the small number of large firms, and the proportionately large number of small

firms, answering “no”. The factor map in Figure 6.49 shows this dependence. In the

case of firm ownership the slightly significant dependence mirrors the situation

regarding firm size with a relatively small number of multinationals, and a

proportionately large number of Irish firms, answering “no”. There was no significant

difference between respondents from different backgrounds (NS).

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Figure 6.48: Use of Customer Service Audits by Firm Size

Figure 6.49: Factor Map – Use of Customer Service Audits by Firm Size

In relation to the elements of customer service that are measured by respondents, the χ2

tests indicate that no significant differences exist by sector, firm size, firm ownership or

respondent background (NS). Of the ten respondents who answered “other” most

indicated that either a wide range of measures (e.g. “a whole range of KPIs”) or

industry-specific KPIs (e.g. “specific motor industry metrics”) were used.

In terms of responses by sector to the statement “Understanding customer service sets

the specification for SCM/supply chain design”, the χ2 test indicates a slightly

significant dependence between the variables (LS). The relatively large number of firms

from the motor and retail sectors responding “neither agree nor disagree” and the

relatively large number of firms in the basic metals and fabricated metals sector

250

responding “agree strongly”, as well as the fact that half of those responding “disagree”

are from the computer, electronic, optical and electrical sector, accounts for this slight

dependence. As shown in Figure 6.50 there is a highly significant dependence in

relation to firm size (VS). A relatively small number of small firms, and a

proportionately large number of large firms, answered “agree strongly”. A relatively

large number of small firms, and a proportionately small number of large firms,

answered “neither agree no disagree”. The factor map in Figure 6.51 illustrates this.


Figure 6.50: Role of Customer Service in SCM/Supply Chain Design by Firm Size

Figure 6.51: Factor Map – the Role of Customer Service in SCM/Supply Chain Design by Firm Size

251

In relation to the responses based on firm ownership and respondent background, the χ2

tests indicate no significance dependences between the variables (NS).


Question 12 asked if “total supply chain cost” was measured by respondents’ firms.

Significant differences exist based on sector, firm size, firm ownership and respondent

background.

In relation to the situation by sector, the χ2 test indicates a slightly significant

dependence between the variables (LS). This is mainly accounted for by the relatively

large number of respondents from the motor trades sector answering “no” and the

relatively large number of respondents from the computer, electronic, optical and

electrical sector answering “yes”. Figure 6.52 shows the situation by firm size with the

χ2 test indicating a highly significant dependence between the variables (VS). As shown

in the factor map in Figure 6.53 this is due to the relatively large number of large firms

answering in the affirmative, with a large number of small firms answering “no”. Figure

6.54 shows the situation by firm ownership with the χ2 test indicating a significant

dependence between the variables (S). As shown in the factor map in Figure 6.55 this

mirrors the situation with regard to firm size with a relatively large number of

multinational firms answering in the affirmative, with a large number of Irish firms

answering “no”. Figure 6.56 shows the situation by respondent background with the χ2

test indicating a highly significant dependence between the variables (VS). As shown in

the factor map in Figure 6.57, this is due to the relatively large number of end-to-end

SCM respondents answering “yes” and the relatively large number of transport

management respondents answering “don’t know/no opinion”.

Of the 29 respondents that indicated how “total supply chain cost” was measured, the

most commonly cited approaches were:

• “landed” cost;

• direct plus indirect costs; and,

• various combinations of discrete cost elements (e.g. “materials cost plus

conversion costs plus logistics costs plus inventory costs” and “all costs

involved in purchasing, manufacturing, warehousing and transport, as well as

forecasting and planning costs, and quality department costs”).

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Figure 6.52: Measurement of “Total Supply Chain Cost” by Firm Size

Figure 6.53: Factor Map - Measurement of “Total Supply Chain Cost” by Firm Size

253

p = 1.1%1.1%1.1%1.1% ; chi2 = 13.0113.0113.0113.01 ; dof = 4444 (SSSS) Dependence is significant.

Figure 6.54: Measurement of “Total Supply Chain Cost” by Firm Ownership

Figure 6.55: Factor Map - Measurement of “Total Supply Chain Cost” by Firm Ownership

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Figure 6.56: Measurement of “Total Supply Chain Cost” by Respondent Background

Figure 6.57: Factor Map - Measurement of “Total Supply Chain Cost” by Respondent Background

In relation to costing methodologies used by respondents, the χ2 tests indicate that no

significant differences exist by sector, firm size, firm ownership or respondent

background (NS).

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Analysis of responses by sector to the statement – “cost/investment optimisation and

customer service optimisation are mutually exclusive” – using the χ2 test indicates no

significant dependence between the variables (NS). Analysis of the responses by firm

size shows a slightly significant dependence between the variables (LS). This is a result

of the relatively large number of small firms answering “neither agree nor disagree” or

“disagree”. Analysis of the responses by firm ownership and respondent background

respectively show no significant dependences between the variables (NS).

Questionnaire Section 2 (Fundamental One): Overall

Table 6.7 summarises the variables tested in section 2 of the questionnaire in relation to

sector, firm size, firm ownership and respondent background. Two specific themes

emerge from this.



Formulation of SCM Objectives

NS VS VS VS

Customer Service Objectives

NS NS NS NS

Customer Service, Price and Product Quality

NS NS NS NS

Use of Customer Service Audits

NS VS S NS

Customer Service Measures

NS NS NS NS

Role of Customer Service in SCM/Supply Chain Design

LS VS NS NS

Measurement of “Total Supply Chain Cost”

LS VS S VS

Costing Methodologies NS NS NS NS The Service/Cost Conundrum

NS LS NS NS


Firstly, there is evidence of highly significant differences in the approaches adopted by

firms based on size and ownership (but not based on sector). In general, smaller

indigenous firms lag behind their larger multinational peers. This is the case in relation

to the formulation of SCM objectives, the use of customer service audits and the role of

customer service in setting the specification for SCM/supply chain design. In line with

this observation, there is some evidence to suggest that differences may exist between

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“modern” and “traditional” sectors as defined by the CSO. For example, firms in the

computer, electronic, optical and electrical sector (“modern”) were more likely to

measure “total supply chain cost” than some of their counterparts in the “traditional”

sectors (e.g. motor trade). This is not surprising given that many “modern” firms are

large multinationals (see section 6.3.7 and Appendix 13). Secondly, there are highly

significant differences based on respondent background particularly in relation to the

formulation of SCM objectives and the measurement of “total supply chain cost”. In

this regard, there is some evidence to suggest a degree of ambiguity in the responses of

function-oriented respondents (e.g. transport, warehouse and purchasing managers).

This is illustrated by the large number of “don’t know” and “sometimes” answers to

question 7 (objectives) and of “don’t know/no opinion” answers to question 12 (supply

chain cost). This contrasts with the apparent clarity and certainty that are a feature of the

responses of end-to-end supply chain managers (for example, no “don’t know” answers

to question 7 and less than 20% “don’t know/no opinion” answers to question 12).

Finally, respondents rank customer service as being more important than price and

product quality in the markets that their companies serve across firms in all sectors and

irrespective of size or ownership. This evidence supports the author’s contention in

section 2.8.2 that customer service is becoming more important than product quality

(now largely an order qualifier) and price (largely determined by the dynamics of

supply and demand in the market and subject to downward pressure in many sectors) as

part of the marketing mix of firms.

6.4.3 Questionnaire Section 3: Supply Chain Integration (Fundamental Two)

The six questions in this section relate to background, internal integration, external

integration and performance measurement.

Background

Figures 6.58 and 6.59 show responses to the statement – SCM is fundamentally

concerned with integration of supply chain activities – by sector and firm size, with the

χ2 tests showing significant differences (S). In the case of sector, this is accounted for

by: (i) all firms (albeit just two respondents) in the waste sector answering “neither

agree nor disagree”; (ii) a large proportion of firms in the wholesale sector answering

“strongly agree”; and, (iii) a relatively large proportion of respondents in the chemical

and pharmaceutical sector answering “disagree”. In the case of firm size, the difference

257

is accounted for by the large number of small firms answering “neither agree nor

disagree” as can be clearly seen in the factor map in Figure 6.60. Analysis of this data

was carried out by firm ownership and respondent background with the χ2 tests

indicating no significant dependencies (NS).


Figure 6.58: Role of Integration in SCM by Sector

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Figure 6.59: Role of Integration in SCM by Firm Size

Figure 6.60: Factor Map - Role of Integration in SCM by Firm Size

The other question about background asked respondents to rank the four levels of

integration proposed by Fawcett and Magnan (2002). The χ2 tests indicate no significant

differences by sector, firm size, firm ownership or respondent background (NS).


In terms of the extent of internal integration in respondent firms by sector, firm size and

respondent background, the χ2 tests indicate no significant differences (NS). There is a

slightly significant dependency in relation to firm ownership (LS) but this is accounted

for by the fact that the only respondent in the “other” category answered “fully

integrated”.

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In relation to the extent of integration with customers as stated by respondents, the χ2

tests indicate no significant differences by sector, firm size, firm ownership or

respondent background (NS). In relation to the extent of integration with suppliers as

stated by respondents, the χ2 tests similarly indicate no significant differences exist by

sector, firm size, firm ownership or respondent background (NS).

Internal and External Integration

As noted in section 3.8.6, the extent to which external integration (i.e. integration with

customers and suppliers) is predicated upon internal integration is also of interest. Table

6.8 shows that the correlation coefficient is 0.39 when a regression model is created

using the data about integration with customers (y) and internal integration (x)

suggesting no significant dependency. The equivalent correlation coefficient for

integration with suppliers (y) and internal integration (x) is higher at 0.47 suggesting a

slightly significant dependency (LS).

Table 6.8: Internal and External Integration

An analysis of the relationship between respondents’ rankings of the various types of

SCI (based on the Fawcett and Magnan (2002) taxonomy) and the three different types

of integration addressed by the survey (i.e. internal, with customers and with suppliers)

revealed no significant dependences in all cases (NS).


A wide range of KPIs are in use in respondents’ firms. The most commonly mentioned

service-related metrics were on-shelf availability (OSA) and out-of-stocks (OOS), as

well as a variety of time-based measures (e.g. order-to-cash cycle times). Stock turns

and/or inventory turnover ratio was mentioned by a number of respondents. In addition,

260

a number of respondents cited quite specific metrics or measurement methodologies

(e.g. SCOR, QUOTIF (quality, on-time and in-full), the “perfect order”, the balanced

scorecard and “the Miles (2010) hierarchy”).

Questionnaire Section 3 (Fundamental Two): Overall

Overall, the great majority of respondents believe that SCM is fundamentally concerned

with integration of supply chain activities. Furthermore, Table 6.9 reveals that there are

few significant differences between different types and sizes of firms. Indifference in a

relatively large proportion of small firms in relation to the role of integration in SCM

again suggests a degree of uncertainty on the part of respondents in relation to this

issue. It is interesting that a relatively high proportion of purchasing (i.e. supplier-

facing) respondents regarded their firms as “highly integrated” with suppliers, while

quite a high proportion of production/operations respondents answered “poorly

integrated” in this regard. This suggests that the role that respondents play in the supply

chain has an influence on their perceptions of the extent of integration. It is also

interesting to note that there is little evidence to support the view that external

integration is predicated on the extent of internal integration, and that there are no

significant differences between firms of different types and sizes in relation to the

importance attributed to different levels of integration.



Role of Integration S S NS NS Importance of Different Types of SCI

NS NS NS NS

Extent of Internal Integration

NS NS LS NS

Extent of Integration with Customers

NS NS NS NS

Extent of Integration with Suppliers

NS NS NS NS


6.4.4 Questionnaire Section 4: Supply Chain Flow Management (Fundamental

Three)

The questions in this section relate to material, money and information flows, including

the use of ICT in respondents’ firms.

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Material Flows

Figure 6.61 shows management of material flows by sector with the χ2 test showing a

highly significant difference across sectors (VS). This is due to the relatively large

proportion of firms in the “machinery and equipment not classified elsewhere”

answering “adequately managed” and those in the wholesale sector answering “very

well managed”. Analysis of management of material flows by firm size, ownership and

respondent background was carried out with the χ2 tests indicating no significant

dependencies (NS).


Figure 6.61: Management of Material Flows by Sector

262

Financial Flows

In relation to financial flows by sector, the χ2 test shows that dependence is slightly

significant (LS). The large number of transportation and storage firms answering “very

well managed” largely accounts for this. Analysis of the management of financial flows

by firm size was carried out with the χ2 test indicating that no significant differences

exist (NS). In relation to management of financial flows by firm ownership and

respondent background the χ2 test indicates that the dependence is slightly significant

(LS).

Information Flows

In relation to the manner in which supply chain information flows are managed as stated

by respondents, the χ2 tests indicate that no significant differences exist by sector, firm

size, firm ownership or respondent background (NS).

ICT Tools

The final question in this section asked about the ICT tools used in respondents’ firms.

Figure 6.62 shows this data by sector with the χ2 test indicating that dependence is

significant (S). Apart from the relatively large proportion of respondents in a number of

sectors who answered “other”, this is largely accounted for by the large proportion of

firms in the transport and warehousing sector that use transport management systems, as

well as the relatively large number of information and communications firms that used

extended enterprise systems. Figure 6.63 shows the data by firm size with the χ2 test

indicating that dependence is highly significant (VS). As shown in the factor map in

Figure 6.64, a high proportion of small firms use transport management systems and a

high proportion of medium-sized firms use enterprise solutions, with large firms using a

range of solution types.

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Figure 6.62: Use of ICT Tools by Sector


Figure 6.63: Use of ICT Tools by Firm Size

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Figure 6.64: Factor Map - Use of ICT Tools by Firm Size

Figure 6.65 shows use of ICT tools by ownership with the χ2 test showing that

dependence is highly significant (VS). The use of transport management systems by a

relatively large number of Irish firms (and the proportionately low level of usage of

these systems by multinationals), as well as the limited use of manufacturing planning

and MRP systems by Irish firms, contribute to this high level of significance. A large

number of Irish firms also answered “other”. Closer analysis of the 19 respondents who

elaborated on this reveals that most tools in this category are stock control/inventory

management systems, as well as other bespoke point solutions. A graphical

representation of this is shown in the factor map in Figure 6.66.

Finally in relation to ICT tools, the χ2 test reveals that dependence is not significant in

relation to respondent background (NS).


Figure 6.65: Use of ICT Tools by Firm Ownership

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Figure 6.66: Factor Map - Use of ICT Tools by Firm Ownership

Information Flows and Material/Financial Flows

As noted in section 3.8.6, it was argued in Chapter 2 that the effective management of

material and money flows is predicated upon the effective management of the related

information flows. This can be tested using the data from the questions in this section of

the questionnaire.

Table 6.10: Dependence of Material and Financial Flows on Information Flows

Table 6.10 shows that the correlation coefficient is 0.55 when a regression model is

created using the data about material flow management (y) and information flow

management (x) suggesting a slightly significant dependency (LS). The equivalent

correlation coefficient for financial flow management (y) and information flow

management (x) is 0.42 again suggesting a slightly significant dependency (LS).

ICT Tools Used and Management of Information Flows

Interestingly, there is also a slightly significant dependency between the ICT tools used

by firms and the manner in which information flows are managed (LS).

266

Questionnaire Section 4 (Fundamental Three): Overall

Table 6.11 summarises the variables tested in section 4 of the questionnaire in relation

to sector, firm size, firm ownership and respondent background.



Material Flows S NS NS NS Financial Flows LS NS LS LS Information Flows NS NS NS NS ICT Tools S VS VS NS


A few key points emerge from this as follows:

• Material and financial flows are “very well managed” in the wholesale, and

transportation and storage, sectors respectively;

• There is further evidence of divergence between Irish and multinational firms in

relation to management of financial flows;

• End-to-end supply chain respondents are more likely to assert that financial and

material flows are “well managed” or “very well managed” – this again suggests

that the role that respondents play in the supply chain has an influence on their

perceptions;

• Firm ownership and size influences the types of ICT deployed with, for

example, large firms using a range of solution types; and,

• Sector plays an important role in terms of the types of ICT used to support

supply chain planning and execution with, for example, transport management

systems – not surprisingly – widely used by firms in the transport and storage

sector.

6.4.5 Questionnaire Section 5: Supply Chain Relationships (Fundamental Four)

The three questions in this section assessed the strength of internal relationships, as well

as those with upstream customers and downstream suppliers.

In relation to the strength of internal relationships by firm size, the χ2 test indicates a

slightly significant dependence (LS). More detailed analysis did not reveal anything of

particular interest. Analysis of the strength of internal relationships by firm size,

ownership and respondent background was also carried out, with the χ2 tests indicating

no significant dependences (NS).

267

In terms of the strength of relationships with upstream (i.e. customer) companies by

sector, the χ2 test indicates the dependence is not significant (NS). Figure 6.67 shows the

data by firm size with the χ2 test suggesting that the dependence is significant (S). This

is mainly due to the relatively large number of small firms – and the proportionately

small number of large firms – answering “neither strong nor weak” (see factor map in

Figure 6.68). Figure 6.69 shows the data by firm ownership with the χ2 test suggesting

that the dependence is highly significant (VS). As shown in factor map in Figure 6.70,

multinationals are much more likely to have relationships with customers that are

characterised as “very strong”. Analysis of the data by respondent background suggests

that the dependence is slightly significant (LS). Further analysis – including a factor

map – did not reveal anything of particular interest.


Figure 6.67: Relationships with Customers by Firm Size

268

Figure 6.68: Factor Map - Relationships with Customers by Firm Size


Figure 6.69: Relationships with Customers by Firm Ownership

Figure 6.70: Factor Map - Relationships with Customers by Firm Ownership

269

Turning to relationships with downstream (i.e. supplier) companies, χ2 tests on these

data indicate that no significant dependences exist by sector, firm size, ownership or

respondent background (NS).

Internal and External Relationships

As noted in section 3.8.6, the extent to which external relationships (i.e. relationships

with customers and suppliers) are predicated upon internal relationships is also of

interest. Table 6.12 shows that the correlation coefficient is 0.36 when a regression

model is created using the data about relationships with customers (y) and internal

relationships (x) suggesting no significant dependency (NS). The equivalent correlation

coefficient for relationships with suppliers (y) and internal relationships (x) is higher at

0.40 suggesting a slightly significant dependency (LS).

Table 6.12: Internal and External Relationships

Questionnaire Section 5 (Fundamental Four): Overall


to sector, firm size, firm ownership and respondent background. The data suggests that

large multinational firms are more likely than their smaller indigenous counterparts to

have strong relationships with their customers. As with integration (see section 6.4.3

above), it is interesting that purchasing (i.e. supplier-facing) respondents were most

likely to characterise supplier relationships as “strong” or “very strong”, with

production/operations respondents more likely to characterise them as “weak”. This

again suggests that the role that respondents play in the supply chain has an influence on

their perceptions of the strength of relationships with suppliers.



Internal Relationships LS NS NS NS Relationships with Customers NS S VS LS Relationships with Suppliers NS NS NS NS


270

It was noted in section 6.4.3 (above) that there is little evidence to support the view that

external integration is predicated on the extent of internal integration. Similarly, there is

little evidence to suggest that the strength of external relationships is predicated on that

of internal relationships.

6.4.6 Questionnaire Section 6: Supply Chain Improvement

Figure 6.71 shows the respondents whose firms have implemented any major supply

chain improvement initiatives in the last two years by sector. The χ2 test indicates that

dependence is significant (S). This is largely as a result of the large proportion of firms

in the motor trades sector that have not implemented any such initiative.

Figure 6.72 shows the data by firm size with the χ2 test indicates that dependence is

highly significant (VS). The factor map in Figure 6.73 shows that this high level of

significance is due to the large number of large firms that have implemented such

initiatives and the large number of small firms that have not. Analysis of the data by

firm ownership (see Figure 6.74) reveals a similar pattern with the χ2 test again

indicating that dependence is highly significant (VS). Irish firms are much more likely

not to have implemented a major improvement initiative than their multinational

counterparts (see factor map in Figure 6.75). Analysis of the data by respondent

background (see Figure 6.76) also reveals a significant dependence with end-to-end

SCM respondents most likely to reply in the affirmative. This, combined with the

relatively high number of respondents in some other categories who answered “don’t

know”, suggests that such individuals are more likely to be aware of major

improvement initiatives that, by definition, are likely to involve an “end-to-end”

approach.

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Figure 6.71: Supply Chain Improvement Initiatives in the Last Two Years by Sector

272


Figure 6.72: Supply Chain Improvement Initiatives in the Last Two Years by Firm Size

Figure 6.73: Factor Map - Supply Chain Improvement Initiatives in the Last Two Years by Firm Size


Figure 6.74: Supply Chain Improvement Initiatives in the Last Two Years by Firm

Ownership

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Figure 6.75: Factor Map - Supply Chain Improvement Initiatives in the Last Two Years by Firm Ownership


Figure 6.76: Supply Chain Improvement Initiatives in the Last Two Years by Respondent Background

From the 70 usable responses provided by participants, Figure 6.77 shows the types of

supply chain improvement initiatives that have been implemented in respondents’ firms

in the last two years.

274

Figure 6.77: Types of Improvement Initiatives Implemented in the Last Two Years

The most common response referred to investment in technology of some kind. For

example, one response stated “implementation of ERP system linked to customers and

suppliers”. Many responses had a primarily operational focus, often with a menu of

options set out. Several responses in this category specifically alluded to the

implementation of lean thinking in firms’ operations. Many respondents referred to

improvements that were primarily organisational in nature. Such responses often

mentioned changes to the architecture of the supply chain and the outsourcing of

functionality. One respondent, for example, spoke of “consolidation of shipments via

one logistics provider”. Some responses were more strategic than operational in focus,

typically mentioning the need for an end-to-end or supply chain wide approach. One

such response referred to a “complete review of the supply chain”. Other respondents

did no more than state targets that had been achieved (e.g. “33% reduction in stock

holding”), while a small number had a specific focus on human resource issues and the

people dimension (e.g. “improved cross-functional communications”). Some responses

fell into more than a single category.

Turning to improvements planned for the next two years, analysis of the data by sector

suggests a slightly significant dependence (LS). More detailed analysis indicates a

relatively large number of firms in the food products, beverages and tobacco sector –

and small numbers in the retail and motor trades sectors – answering “yes”. Figure 6.78

shows the data by firm size with the χ2 test suggesting a highly significant dependence

(VS). This mirrors the situation with regard to improvements initiated in the last two

years with major initiatives much more likely to have been planned in large firms than

in small ones. This is clearly shown in the factor map in Figure 6.79. A similar situation

can be seen when the data is analysed by firm ownership (see Figure 6.80) with the χ2

test again suggesting a highly significant dependence (VS). A large number of Irish

firms – and a proportionately small number of multinationals – indicated that no major

275

initiative was planned. This can again be quite clearly seen in the factor map in Figure

6.81. Finally, and as with improvements initiated in the last two years, the data shows

significant differences based on respondent background (see Figure 6.82). A relatively

large proportion of end-to-end SCM respondents answered in the affirmative, with

relatively high numbers of respondents in some other categories again answering “don’t

know”.


Figure 6.78: Supply Chain Improvement Initiatives in the Next Two Years by Firm Size

Figure 6.79: Factor Map - Supply Chain Improvement Initiatives in the Next Two Years by Firm Size

276


Figure 6.80: Supply Chain Improvement Initiatives in the Next Two Years by Firm Ownership

Figure 6.81: Factor Map - Supply Chain Improvement Initiatives in the Next Two Years by Firm Ownership

277


Figure 6.82: Supply Chain Improvement Initiatives in the Next Two Years by


From the 48 usable responses provided by participants, Figure 6.83 shows the types of

supply chain improvement initiatives planned in respondents’ firms in the next two

years. The examples illustrate the nature of typical planned improvements. As with

initiatives undertaken in the last two years, technology-oriented improvements are most

common. There is evidence of a stronger focus on strategic chain-wide improvements in

future planning than in earlier initiatives. Initiatives aimed at operational and

organisational improvement are again common. Two firms in the sample cited

initiatives aimed specifically at generating improvements in environmental

sustainability. Some responses fell into more than a single category.

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Figure 6.83: Types of Improvement Initiatives Planned in the Next Two Years

Finally, respondents were asked about policy initiatives that could be adopted to

facilitate wider adoption of SCM. Figure 6.84 shows a breakdown of the 28 usable

responses received. The most common response related to education and training with

several respondents suggesting that support be provided for such initiatives. Several

respondents referred to the need for greater recognition of the role of SCM particularly

at a senior level in organisations. Various possible initiatives were cited that had

technological and environmental foci. Two respondents felt that support could be

provided in relation to information about the “dynamics of the market place”. Two

respondents made reference to the notion of Ireland being a global SCM hub, while two

others referred to possible company-specific initiatives. Some responses fell into more

than a single category.

279

Figure 6.84: Possible Policy Initiatives

Questionnaire Section 6 (Supply Chain Improvement): Overall


to sector, firm size, firm ownership and respondent background. Again a strong theme

here is that the larger multinationals are more likely than smaller indigenous firms to

have implemented major supply chain improvement initiatives. This appears to be

particularly true in certain CSO-defined “traditional” sectors (e.g. motor trades). A

similar picture emerges in relation to planned improvements. As noted above, end-to-

end supply chain respondents are more likely than their functional counterparts to be

aware of recently implemented or planned improvement initiatives. Given the supply

chain wide nature of “major” initiatives, it seems reasonable to surmise that these

individuals are more likely to be involved in such improvement projects. Finally, it is

interesting to note that the majority of implemented and planned improvement

initiatives are characterised as either technological or operational (i.e. rather than

people-related or strategic).

280

Sector Firm Size

Firm Ownership


Recent Improvement Initiatives

S VS VS S

Planned Improvement Initiatives

LS VS VS S


6.4.7 Relationships Across Sections

The foregoing focussed on relationships between variables within each section of the

questionnaire. This section extends that focus to explore relationships between variables

across different sections – cross-sectional analysis. As noted in section 3.8.6, three

issues are of particular interest in this context:

1. the relationship between different types of SCI and the manner in which

information flows are managed (given the concept that integration is predicated

upon effective information management);

2. the relationship between different types of SCI and the use of ICT tools (given

the role often attributed to ICT as an enabler of SCI); and,

3. relationships between different types of SCI and the strength of different types

of relationships.

SCI and Information Flows

Figure 6.85 shows the data for the extent of internal SCI and the manner in which

information flows are managed. The χ2 test suggests that the dependence is highly

significant (VS).

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Figure 6.85: Internal Integration and Information Flow Management

The factor map in Figure 6.86 shows a clear link between supply chains that are “poorly

integrated”, and “poorly managed” or “very poorly managed” information flows. The

corollary of this is that supply chains that are “fully” or “highly” integrated tend to be

those where information flows are “well managed” or “very well managed”.

Figure 6.86: Factor Map - Internal Integration and Information Flow Management

A similar situation exists in relation to, on the one hand, the extent of integration with

both customers and suppliers, and, on the other hand, the manner in which information

flows are managed. Figures 6.87 and 6.88 show this data with the χ2 tests suggesting

282

that dependences are highly significant (VS). This can be clearly seen in the factor maps

in Figures 6.89 and 6.90.


Figure 6.87: Integration with Customers and Information Flow Management


Figure 6.88: Integration with Suppliers and Information Flow Management

283

Figure 6.89: Factor Map - Integration with Customers and Information Flow Management

Figure 6.90: Factor Map - Integration with Suppliers and Information Flow Management

SCI and ICT Tools Used

In terms of the relationship between ICT tools used in respondents’ firms and the extent

to which internal supply chain activities are integrated, the χ2 test indicates that the level

of dependence is not significant (NS). A similar situation exists with regard to

integration with both customers and suppliers.

SCI and Relationships

As shown in Figures 6.91 to 6.93, the extent to which activities are integrated is

strongly correlated with the strength of relationships. The χ2 tests indicate highly

significant dependences in the case of internal integration and relationships, as well as

for integration and relationships with suppliers and customers (VS). The factor maps in

Figures 6.94 to 6.96 show this very clearly.

284


Figure 6.91: Internal Integration and Relationships


Figure 6.92: Integration and Relationships with Customers

285


Figure 6.93: Integration and Relationships with Suppliers

Figure 6.94: Factor Map - Internal Integration and Relationships

286

Figure 6.95: Factor Map - Integration and Relationships with Customers

Figure 6.96: Factor Map - Integration and Relationships with Suppliers

6.4.8 The Contingency Model

The contingency approach is a flexible method of analyzing bivariate relationships such

as those set out in the foregoing sections (see, for example, Bryman and Bell (2003)). A

contingency model provides a means of compiling the results of the various statistical

tests that have been carried out by the author. Figure 6.97 shows the overall set of

relationships between the variables. This comprises:

1. Relationships between all data and the various demographic variables (indicated

by the bold lines);

2. Relationships between variables within the “integration”, “flows” and

“relationships” groups (indicated by the plain lines); and,

3. Relationships between selected variables across groups based on the cross-

sectional analysis described in section 6.4.8 (indicated by the dotted lines).

287

Figure 6.97: Overall Contingency Model

The relationships described in sections 6.4.1 to 6.4.6 are summarized in the

demographic data contingency model in Figure 6.98. This essentially represents a

decomposition of the overall contingency table in Figure 6.97. To facilitate clarity,

relationships that are not significant (NS) have been omitted.

288

Figure 6.98: Demographic Data Contingency Model

A number of points emerge from an analysis of this contingency model.

1. Larger multinational firms and their smaller indigenous peers differ significantly

in relation to the SCM practices adopted. This is particularly the case in relation

to the setting of objectives, internal and external integration, the management of

financial flows and integration with customers. As noted in section 6.4.6, larger

289

firms are more likely than their smaller counterparts to have implemented or

planned major supply chain initiatives.

2. Differences exist between CSO-defined “modern” and “traditional” sectors. This

is the case in relation to, for example, measurement of total supply chain cost

and planned major supply chain improvement initiatives. It is also evident in the

contrast between the relative clarity of responses from the former and the

ambiguity and/or uncertainty of responses from the latter in relation to some of

the background questions.

3. Respondent background has an impact on the answers provided. This is

illustrated by the contrast between the apparent clarity and certainty that are a

feature of the responses of end-to-end supply chain managers and the ambiguity

that is a feature of some of the responses of function-oriented managers (for

example in relation to the formulation of SCM objectives and the measurement

of total supply chain cost). Similarly, the former are more likely than the latter to

be aware of recently implemented or planned improvement initiatives. As noted

in section 6.4.6, this may be a result of the fact that end-to-end supply chain

managers are more likely to be involved in such improvement projects. The

position of respondents in the chain also influences their perceptions in relation

to integration and relationships (for example, a relatively high proportion of

supplier-facing respondents regarded their firms as “highly integrated” with

suppliers and characterised their supplier relationships as “strong” or “very

strong”).

Finally, Figure 6.99 shows relationships between variables within sections and across

sections (i.e. “cross-sectional”).

290

Figure 6.99: Contingency Model (within and between variable groups)

A number of points emerge from an analysis of this contingency model.

1. There is little evidence to support the view that external integration is predicated

on the extent of internal integration (see section 6.4.3) or that the strength of

external relationships is predicated on that of internal relationships (see section

6.4.5). Integration with suppliers is ranked as most important by respondents and

this is manifested in the relatively high levels of integration with suppliers, as

well as in the relative strength of relationships with suppliers.

2. The dependencies between, on the one hand, the manner in which information

flows are managed and, on the other hand, the manner in which material and

information flows are managed, is only slightly significant (LS). A similarly low

level of significance exists between the ICT tools used by firms and the manner

in which information flows are managed (see section 6.4.4). This challenges the

author’s assertion in Chapter 2 that the effective management of material and

money flows is predicated upon the effective management of the related

information flows, and that ICT is a key enabler of this process. In relation to the

latter, it was further noted in section 6.4.7 that there is no significant relationship

between ICT tools used in respondents’ firms and the extent to which supply

291

chain activities are integrated. This again challenges the view posited by the

author in Chapter 2 that ICT is a key enabler of SCI.

3. Notwithstanding point 2 (above), there is a highly significant dependence

between the extent of internal and external SCI and the manner in which

information flows are managed. This suggests that it is the nature of information

management rather than the specific ICT tools used that is the critical success

factor.

4. As noted in section 6.4.7, the extent to which activities are integrated is strongly

correlated with the strength of relationships. This is as might be expected and

suggests a high level of internal consistency (and, therefore, reliability) across

the data.

6.4.9 Using Questionnaire Data to Answer RQs

This section reviews the main findings from the questionnaire survey as they relate

specifically to the RQs set out in Chapter 2. This discussion is restricted to the survey

findings – an integrative analysis of data collected via focussed interviews (Chapter 4),

focus groups (Chapter 5) and the survey forms the basis of much of Chapter 7.

RQ1 - What is the current level of understanding of SCM in practice?

As noted earlier, there is some evidence of variation in understanding between

respondents from different backgrounds. Such variations have been described in

previous sections. This reflection is based on responses to questions in section 1 of the

survey (background), as well as the relatively small number of questions that

specifically solicited the personal opinions of respondents (questions 11, 14 and 15).

Notwithstanding that there is some evidence from the survey that the supply chain is

quite narrowly defined and understood by respondents from certain sectors and that

there is a limited emphasis amongst respondents on the product life cycle orientation to

the supply chain, overall the level of understanding appears to be quite high. For

example, almost three quarters of respondents alluded to the need for different links in

the supply chain to work together properly when defining SCM. This is in line with the

essence of SCM thinking (i.e. the integration concept) as articulated in Fundamental

Two. In line with this finding, the great majority of respondents either agreed or agreed

strongly that SCM is fundamentally concerned with integration of supply chain

activities, with almost two thirds of respondents defining the supply chain as being

292

inter-firm (i.e. external). Furthermore, the concept that “understanding customer service

sets the specification for SCM/supply chain design” is recognised by the great majority

of respondents, as is the notion that cost/investment and customer service optimisation

need not be mutually exclusive.

There is mixed evidence in relation to the push/pull orientation of respondents. The

prevalence of the word “customer” in respondents’ definitions of “supply chain” and

“supply chain management” suggests that a strong customer/demand (or pull)

orientation exists. However, backward integration with suppliers is regarded as more

important than forward integration with customers – this suggests more of a supply (i.e.

“push” orientation) in the overall approach of respondents.

In terms of the Larson and Halldorsson (2004) taxonomy, the Four Fundamentals

construct can be characterised as “unionist-intersectionist” (see Chapter 2). As noted in

sections 6.3.1 and 6.4.1, this is in line with the majority of perspectives provided by

survey respondents. If – as the author contends – the Four Fundamentals construct

represents a comprehensive definition of SCM, then this suggests that a relatively high

level of understanding of the thrust of this construct exists in practice.

RQ2 - What is the current level of adoption of SCM?

The above observations in relation to RQ1 are based on responses to questions asked in

section 1 of the questionnaire and a small number of other questions that specifically

solicited the personal opinions of respondents. The following observations in relation to

RQ2 are based on the responses received to the other questions, all of which solicited

information about firms’ SCM practices rather than respondent opinion. As noted

earlier, there is evidence of variation in relation to SCM adoption between firms based

on: (i) sector; (ii) firm size; and (iii) firm ownership. Such variations have been

described in some detail in previous sections. From the data analysis described in the

preceding sections, a mixed picture emerges in relation to SCM adoption by firms in

Ireland as shown in Table 6.28 (below).

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SCM Fundamental Dimension Positive Negative

Objectives Formulation Majority Limited

Customer Service Majority Audits Customer Service Range Some Missing Measures SC Costing Methodologies Total SC Cost

Philosophy Internal Integration Highly/Somewhat Fully/Highly

External Integration Highly/Somewhat Fully/Highly

KPIs Range Inter-Organisational

Management of Flows All Very Well/Well Adequately

ICT ERP Enabler

Relationships All Strong

Table 6.15: SCM Adoption

While the majority of firms do formulate specific SCM objectives, these are somewhat

limited in that they relate in the main to the traditional areas of cost and customer

service. Objectives that relate specifically to environmental sustainability, for example,

are formulated in a small but significant number of firms. The majority of firms use

customer service audits to understand customer expectations and competitor

performance. A relatively wide range of customer service elements are measured with

on-time delivery and product availability measured by the majority of respondents.

However, some potentially important elements of customer service (e.g. information

request responsiveness) are not measured in most firms. It is also worth noting that

respondents rank customer service more highly than price or product quality, and that

SCM objectives that relate specifically to customer service are most common

(formulated in 70.5% of firms). Combined with the fact that the great majority of

respondents concurred with the notion that customer service sets the specification for

supply chain design and management, the evidence suggests that this key concept is

well embedded in firms’ thought processes. Although “total supply chain cost” is

measured in less than a quarter of firms, wide use is apparently made of formal costing

methodologies such as ABC.

In relation to SCI, the fact that the great majority of respondents indicate that internal

activities were either “highly integrated” or “somewhat integrated” could be interpreted

as being positive. However, given that half of the respondents suggested that their

internal supply chain activities were only “somewhat” integrated suggests that there is

significant room for improvement in this area. A similar picture exists in relation to

294

external integration with large numbers again suggesting that their activities were only

“somewhat” integrated with those of their customers and suppliers (47.7% and 37.9%

respectively). For example, just 34.8% of respondents assessed their activities as being

fully or highly integrated with those of the customers (the equivalent percentages for

internal and supplier integration are 42.4% and 44.7%). While firms measure a wide

range of performance parameters, there is little evidence of any genuinely inter-

organisational KPIs being used.

The majority of firms suggested that material and money flows are well or very well

managed. However, a significant number of respondents suggested that material, money

and – in particular – information flows were only “adequately” managed. This again

suggests that there is significant room for improvement in how flows are managed,

particularly information flows. In terms of ICT adoption, the majority of firms indicated

that they used enterprise solutions (i.e. ERP). However and as noted in section 6.4.8, the

analysis challenges the view that ICT is a key enabler of SCI.

Finally, relationships – both between internal functions, as well as with external

customers and suppliers – were judged to be strong in the majority of firms.

While major supply chain improvement initiatives have been undertaken in the majority

of firms during the last two years, the majority of respondents indicated that their firms

either had no major supply chain initiative planned for the next two years or were

unaware of any such initiative. It is interesting to note that the majority of implemented

and planned improvement initiatives are characterised as either technological or

operational (i.e. rather than people-related or strategic). This suggests that the focus of

improvement continues to be quite limited despite the evidence that planned future

initiatives have a more strategic and chain-wide orientation than their predecessors.

RQ3 - What are the critical success factors and/or inhibitors to success in putting SCM

theory into practice?

Given the largely qualitative nature of this question, it is not possible to use the

questionnaire data in isolation to answer this question in any meaningful way.

Nonetheless, some possible critical success factors and inhibitors to success may be

implied from the responses provided by participants to some of the questions.

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Firstly, firm demographics impact significantly on the extent to which SCM theory is

implemented in practice, with smaller indigenous firms (particularly in “traditional”

sectors) lagging behind their larger multinational counterparts, most of which operate in

“modern” sectors. Secondly, an interesting picture emerges in relation to the core SCM

concept of integration. Backward integration (i.e. with suppliers) is regarded as the most

important form of SCI with integration of internal activities regarded as least important.

High levels of integration are predicated on strong relationships with respondents

regarding the latter as being strong internally, as well as with external customers and

suppliers. The relatively low level of importance attached to internal integration might

suggest that respondents feel that their firms have made progress in this area over time.

However, this does not necessarily appear to be the case as a minority of respondents

suggested that their internal activities were either fully or highly integrated. It is also

interesting to note that despite being regarded as the most important form of integration,

a minority of respondents suggested that their firms’ activities were either fully or

highly integrated with those of their suppliers. Thirdly, the data suggest that there may

be a lack of a strategic approach in terms of planning and implementing supply chain

improvement initiatives. This is illustrated by the fact that a minority of firms (35.6%)

formulate objectives that relate specifically to supply chain investment, and that a

minority of past and planned improvement initiatives could be regarded as strategic or

chain-wide. Finally, and as noted in section 6.4.8, the analysis suggests that it is the way

in which information flows are managed – i.e. rather than the specific ICT tools that are

used – that is a critical success factor.

RQ4 - What practical measures could be implemented at policy/supply chain/firm level

to improve the level of effective SCM adoption?

As built into the research design described in section 3.5, answering this question

requires an analysis of all data collected during the empirical part of this study – this

integrated analysis will the focus of much of Chapter 7. It is not possible, therefore, to

generate many meaningful insights into this question using the questionnaire data alone.

However, questionnaire respondents were asked about policy initiatives that could be

adopted to facilitate wider adoption of SCM and figure 6.84 shows a breakdown of the

28 usable responses received. Many possible measures were proposed with the most

common relating to education and training initiatives.

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6.5 Summary/Conclusion

This chapter has described the third and final phase of the author’s empirical work,

namely the questionnaire survey. The data generated has provided some useful insights

into each of the author’s four research questions. As noted in Chapter 3, what is

important in this research is how the findings from each element of the empirical work

(i.e. focussed interviews, focus groups and the questionnaire survey) together provide

answers to these questions. The focus of Chapter 7 is on this integrative analysis in line

with the methodological pluralism – and associated use of combinatory data collection

and analysis techniques – that is central to the author’s overall research design.

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CHAPTER 7

DISCUSSION OF FINDINGS

7.1 Introduction

This chapter integrates the work described in the previous chapters of this thesis. It does

so by firstly discussing the findings from the three phases of the author’s empirical

research in a holistic and integrated manner (section 7.2). As noted in section 3.5, while

each phase aimed to address one or two of the RQs specifically (as shown in Figure 3.5)

the research was designed so that all phases could potentially contribute to the

generation of insights into all RQs. This is in line with the concept of methodological

pluralism. It goes on to relate these findings to the existing body of scholarly

knowledge. It does so by relating the empirical research findings to: (i) the author’s

Four Fundamentals construct (section 7.3.1); and, (ii) other relevant themes from the

literature review in Chapter 2 (section 7.3.2). The former enables a description of how

this construct was refined to reflect the empirical evidence, while the latter ensures that

the empirical findings are linked to key contemporary issues and debates in the extant

literature. Some final reflections are then introduced by way of summarising and

concluding this chapter (section 7.4).

7.2 Integrated Discussion of Empirical Findings

This section discusses the findings from the three phases of the author’s empirical

research in a holistic and integrated manner. It does so with specific reference to the

four research questions (RQs) set out initially in section 2.15. This discussion does not

purport to answer each of the questions in a definitive manner; rather, it provides fresh

insights into the issues under investigation.

7.2.1 RQ1 - What is the current level of understanding of SCM in practice?

As noted in section 3.5, phases I and II of the empirical research provide the primary

mechanism for answering RQ1. Sections 4.4 and 5.4 described how the more qualitative

components of the work (i.e. the focussed interviews and focus groups respectively) can

be used to answer RQ1. In addition to its primary role in answering RQ2, the

questionnaire survey was designed so that insights would also be generated in relation

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to the other RQs. Section 6.4.9 discussed these insights as they apply to the all RQs

(including RQ1). This section focuses on how the findings from the questionnaire

survey of phase III can be used in conjunction with the more qualitative findings to

provide further insights into RQ1.

Firstly, it should be recognised that there was a degree of divergence among the six key

informants interviewed during phase I of the empirical research in relation to what the

supply chain and its management entails. A comparison of the interview findings with

those from phases II and III of the research (i.e. the focus groups and questionnaire

survey) further highlights this divergence. For example, the word “network” was

commonly used by interviewees in phase I but not to as great an extent by survey

respondents in phase III (see word cloud in Figure 6.26). Focus group participants –

particularly FG1 (see Table 5.1) – did, however, use the concept of a “network of

companies” in articulating their understanding of SCM. Similarly, the “flow” concept

was referred to extensively by phase I interviewees and by all three focus groups but to

a much lesser extent by survey respondents (see word clouds in Figures 6.26 and 6.27).

However, much of this divergence is a question of emphasis and language rather than an

indication of fundamental differences of substance. Furthermore, the different forms of

data collection used by the author are likely to have impacted on the precise language

used by informants. Secondly, the findings – particularly, but not exclusively, from the

questionnaire survey – suggest that quite a narrow view of SCM prevails in some

sectors – particularly in those defined by the CSO as “traditional”. For example, many

respondents from the retail and motor sectors considered that SCM was simply about

the management of suppliers and the supply base (see section 6.4.1).

Notwithstanding the above caveats, all three phases of the empirical research suggest

that the overall level of understanding of SCM is generally quite high. The findings

from phase I (see Table 4.2) indicate that interviewees’ understanding of the supply

chain concept is very much in line with the Four Fundamentals construct thus

suggesting a high level of comprehension of the concept. As noted in section 5.4.2, the

author’s analysis of the findings from phase II suggests that a thorough understanding of

the main elements of SCM is evident from the focus group sessions. Similarly (and as

noted in section 6.8.9), the author’s analysis of the data from phase III concluded that

the level of understanding of SCM appears to be quite high.

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In relation to informants’ understanding of the logistics concept, there was a much

higher level of agreement. Section 4.4.2 noted that most interviewees considered

logistics to be primarily concerned with the movement and storage of product. Nothing

of any significance emerged from any of the focus group discussions that was not in

accordance with this view and the great majority of survey respondents indicated that

logistics is primarily concerned with transportation (i.e. “move”) and/or transportation

and storage (i.e. “move/store”) in the supply chain (see Figure 6.31). It is interesting to

note that just one phase I interviewee (from the electronics sector) and one focus group

(FG3 – see Figure 5.4) specifically alluded to the reverse logistics concept. FG3 did

generally agree that this was an aspect of logistics/SCM that was likely to grow in

importance in the future in the light of legislative developments and increased

environmental awareness.

The taxonomy of Larson and Halldorsson (2004) provides a useful way of establishing a

profile of companies in terms of their understanding of the relationship between SCM

and logistics (see section 2.10.2). As shown in Table 4.2, three of the phase I

interviewees were characterised as “unionist/intersectionist”, one as

“intersectionist/unionist”, one as “unionist” and one as “re-labelling”. This is broadly in

line with the findings from phases II and III. For example, almost 90% of questionnaire

survey respondents fell into the “unionist” category (see Figure 6.3) but with a

significant minority specifically noting that logistics is concerned with operational

issues associated with the execution of the supply chain (i.e. a largely “intersectionist”

perspective). The model proposed in Figure 4.3 illustrates this approach. It was

inductively developed based entirely on the findings from phase I. The findings from

phases II and III support the model’s validity. For example, in the questionnaire survey

the “make” (i.e. NACE C - “manufacturing”), “move”/”store” (i.e. NACE H –

“transportation and storage”) and “sell” (i.e. NACE G – “wholesale and retail trade”)

links in the “buy-make-store-move-sell” model represent 24.2%, 9.0% and 57.8%

respectively of the total population. Thus, over 90% of the sample surveyed by the

author is from these core supply chain domains. As the findings from the survey are

wholly in line with the model – as indeed are the focus group findings – this suggests it

provides a robust representation of the relationship between the SCM and logistics

domains. The model can in turn be regarded as being an integral element of the Four

Fundamentals construct – see section 7.3 (below).

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7.2.2 RQ2 - What is the current level of adoption of SCM?

As noted in section 3.5, phase III of the empirical research provides the primary

mechanism for answering RQ2. Section 6.4.9 explained how the questionnaire survey

findings were used to provide insights into this question (and, indeed, the other three

RQs). It was further noted in section 3.5 that these insights will be will be supplemented

with deeper and richer insights generated during phases I and II as appropriate. This

section focuses on how the findings from the questionnaire survey of phase III can be

supplemented with the focussed interview findings from phase I, as well as with the

focus group findings from phase II, to provide further insights into RQ2.

The discussion in section 7.2.1 (above) reveals a relatively high level of understanding

of SCM thinking among respondents. However, from the author’s analysis of the

questionnaire survey data (see section 6.8.9) a mixed picture emerges in relation to

SCM adoption by firms in Ireland as shown in Table 6.28. For example and as noted in

section 6.4.8, larger multinational firms and their smaller indigenous peers differ

significantly in relation to the SCM practices adopted in terms of the setting of

objectives, internal and external integration, financial flow management and customer

integration. Similarly, significant differences exist between the practices of firms in the

CSO-defined “modern” and “traditional” sectors. This is the case in relation to, for

example, measurement of total supply chain cost and planned major supply chain

improvement initiatives.

Two specific points from phases I and II of the empirical research perhaps point to the

crux of the issue in this regard. One of the interviewees in phase I (Manufacturer 2 - a

large indigenous producer of food and allied products) was knowledgeable in relation to

SCM concepts and definitions. However, he suggested that “management of the supply

chain was an aspirational and theoretical notion” (see Table 4.1). During one of the

focus group sessions (FG3), the MAN9 participant raised the specific question as to

whether high levels of internal integration were a pre-requisite for external integration.

As noted in section 5.2.3, there was general agreement – at least on a conceptual level –

that this was the case. However, participants struggled to illustrate this opinion with

concrete practical examples. Both examples are illustrative of the point made by Storey

et al. (2006) when they asserted that (see section 2.15.1):

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While there is an emerging body of theory which ostensibly offers a relatively

coherent and compelling prescriptive narrative, predominant practice is at

considerable odds with this conceptualisation (p. 755).

In general, the author’s findings from all three phases of the empirical research are very

much in line with this perspective. This goes to the kernel of the issue under

investigation in this thesis – i.e. the divergence between theory and practice. In an Irish

context, the author’s findings strongly support the existence of such a divergence. An

apparently high level of understanding of SCM concepts and principles among the great

majority of informants across all phases of the research coexists with a relatively low

level of adoption of some of these concepts and principles in reality. It appears that an

“understanding into action conundrum” or an “implementation deficit disorder” exists.

Given the centrality of the integration concept in SCM (see section 2.9.1), the author

paid specific attention to this issue in the analysis of findings across the three phases of

empirical work. A comparison between phase I of the author’s empirical research and

the earlier study of Lummus et al. (2001) indicated that there appeared to be a stronger

emphasis in the former the external dimension of integration (see section 4.4.5).

Notwithstanding the difficulties implicit in making such comparisons, it was surmised

that this may be an indication of progress in relation to internal aspects of integration

over the decade between the two studies. In line with this, the questionnaire survey data

(see Table 6.5) revealed that internal integration was regarded by respondents as the

least important of the four levels of integration posited by Fawcett and Magnan (2002).

In other words, the evidence suggests that attempts to build highly integrated inter-firm

networks require that high levels of intra-firm integration are already in place, and that

some progress had been made in relation to the latter. However, the primary emphasis

of focus groups participants was on the internal dimension. For example, FG1 referred

to “integration of intra-firm business process” (see Figure 5.2) and FG2 had a strong

focus on “organisational design” and the “fragmentation to integration” concept in this

context (see Figure 5.3). As noted above, while there was general agreement in FG3 that

high levels of internal integration were a pre-requisite for external integration – in line

with the conventional wisdom in this regard – participants struggled to illustrate this

opinion with concrete practical examples. However, analysis of the questionnaire survey

data showed that there is little evidence to support the conventional wisdom – as

articulated by, for example, Lambert (2004) and Kotzab et al. (2011) – that external

integration is predicated on the extent of internal integration. Similarly, there was little

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evidence to suggest that the strength of external relationships is predicated on that of

internal relationships. A study by Mena et al. (2009) in the UK food and drink sector

challenged this conventional wisdom and suggested that it is possible to have

relationships with suppliers and customers that are more collaborative than those

between functions within an organisation. The author’s survey data supports this view

as it reveals than many firms have higher levels of integration – and stronger

relationships – with suppliers and customers than they do internally.

In the context of RQ2, it is appropriate to explore the extent to which practices have

changed over time. A comparative analysis of the phase I of author’s empirical work

and the previous study of Lummus et al. (2001) upon which it is based is difficult for

the reasons set out in section 4.4.5. Notwithstanding this caveat, the two studies do not

reveal that practitioner perspectives have progressed significantly over the last decade

and/or that geographical differences exist. However, larger scale surveys of opinion

would be needed for hypotheses about such differences to be deductively tested. It is

also difficult to make direct comparisons between phase III of the author’s empirical

work and an earlier investigation into the SCM practices of firms in Ireland (NITL,

2005) as they adopted quite different methodological approaches and were carried out

with quite different overall goals. However, a number of questions in the author’s

questionnaire survey were worded in a manner that would facilitate a degree of

comparison with the earlier empirical study (see section 3.8.5). The earlier study

suggested that, while pockets of SCM excellence did undoubtedly exist, there was

significant room for improvement. The current research suggests that, while

improvements have taken place during recent years, this overall picture has not changed

to any great extent. Replication of the current study over time would allow a

longitudinal profile of SCM adoption to be developed. Part of the author’s literature

review as presented in Chapter 2 involved an analysis of earlier empirical studies

directly relevant to the current research. The 90 previous empirical SCM/logistics

studies that were reviewed in some detail (see Appendix 7) used a wide variety of

methodological approaches and data collection methods. This makes direct comparison

between the studies very difficult and suggests that there is significant scope for

replication of empirical studies that are robust and well informed by the extant

literature. Section 8.4 explores this and other possible avenues of potentially fruitful

research in more detail.

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7.2.3 RQ3 - What are the critical success factors and/or inhibitors to success in

putting SCM theory into practice?

As indicated in the overall research design in Figure 3.5, insights into this question were

largely derived from more qualitative phases of the author’s empirical work (i.e. the

focussed interviews and focus groups). As with RQ1, the survey questionnaire was

carefully designed with a view to facilitating its use in answering RQ3 – section 6.4.9

describes the main issues that emerged from the analysis in this regard. In essence – and

as set out in section 3.5 – the purpose with RQ3 is to inductively develop a

comprehensive list of critical success factors and/or inhibitors to success using the

findings from the focussed interviews and focus groups, as well as from the author’s

analysis of the questionnaire survey data. Figure 7.1 shows the main issues that

emerged. They are grouped into clusters to facilitate explanation and interpretation.

Figure 7.1: Critical Success Factors and/or Inhibitors to Success

Business and Supply Chain Environment

The first two factors are part of the business environment within which a firm and its

wider supply chain operates. The first issue in this cluster relates to the relative power

of firms in the supply chain. One interviewee specifically raised this issue during phase

I of the author’s empirical work. As noted in section 4.4.4, Retailer 1 (a large

department store) suggested that its relative power over suppliers was such that the

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development of relationships based on trust was not deemed to be necessary. In phase II

of the work, FG1’s reflection on the Four Fundamentals suggested that the construct

needed to have a stronger emphasis on the relative power of firms and its impact in

determining the dynamics of the supply chain as a whole. In other words, the degree of

power and influence of each party to a relationship strongly influences the nature of

relationships between firms in the supply chain. This echoes the view of Croom et al.

(2000) and suggests that the relative power of any supply chain actor influences the

SCM adoption process and is, therefore, a critical success factor.

The author’s Four Fundamentals construct was developed to answer a call in the extant

literature for the development of a common understanding of SCM. Two components of

the author’s empirical work involved the specific exploration of issues along horizontal

supply chains and both were revealing in this context. In the phase I focussed interviews

there was a degree of divergence among the six key informants from different links

across the supply chain (i.e. manufacturing, 3PL/distribution and retail) in relation to

what the supply chain and SCM entails. Based on this and as noted in section 4.5, the

development of common definitions and understandings between supply chain partners

would appear to be a critical success factor; the corollary of this is that a lack of

definitional consistency and common understanding may be an inhibitor. The

discussions during the focus group sessions – particularly FG2 – reinforced this view. A

general consensus emerged during that group’s discussion that, while traditional

approaches such as the “seven rights” provide a checklist of the main objectives of

SCM, they do not represent comprehensive definitions of the domain (see section

5.2.2). More interestingly in this context, the FG2 discussion amongst practitioners from

the food industry suggested that firms from different parts of the same supply chain can

have different emphases and understandings, and that this can negatively impact on

attempts to achieve higher levels of integration. The key here is that supply chains – by

definition – involve actors from different backgrounds and with different levels of

understanding, and that the development of more consistency in terms of terminology

and understanding is an important pre-requisite for increased collaboration and

integration.

Company and Management Characteristics

Phases II and III of the author’s empirical work highlighted the need for a strong focus

on customer requirements and a concomitant pull-orientation. Customers are part of a

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firm’s business environment and also define (or “set the spec” – see section 2.8.2) for

integrated SCM (Korpela et al., 2001). FG1 was strongly of the view that the Four

Fundamentals construct needed to further emphasise the importance of customer focus

(see section 5.2.1). From the questionnaire survey there is mixed evidence in relation to

this issue. The prevalence of the word “customer” in respondents’ definitions of the

phrases “supply chain” and “supply chain management” suggests that a strong

market/demand (i.e. pull) orientation exists. However, backward integration with

suppliers was regarded as more important than forward integration with customers –

this suggests more of a supply (i.e. push) orientation. In any case, the concept that SCM

is driven by customer demand is clear from the literature (see Chapter 2), and the

associated concept that clear customer focus is a critical success factor is evident from

the author’s empirical research.

As noted in section 6.4.9, the results from phase III of the author’s empirical work

suggests that firm demographics – notably sector and size – impact significantly on the

extent to which SCM theory is adopted in practice. In terms of sector, firms in CSO-

defined “traditional” sectors lag behind their counterparts in the “modern” sectors. In

terms of size, smaller (and mainly indigenous) firms also lag behind their larger (and

mainly multinational) counterparts. Interestingly, no significant differences exist by

sector or firm size in terms of how respondents rank customer service relative to price

and product quality. This suggests that the broad dynamics of different markets have

evolved in a similar manner and can not explain the divergence in SCM adoption.

However, both the author and the focus group facilitator noted the different perspectives

of participants from different sectors during the focus group sessions. In general, this

was in line with “traditional” and “modern” sectors. For example, companies operating

in the electrical/electronics and FMCG sectors (e.g. MAN1, MAN3, MAN4, MAN5,

MAN7, MAN9 and many of the 3PL participants) appeared to have more advanced

practices and tools in place than their peers in the more highly regulated sectors (e.g.

MAN2, MAN6, MAN9 and the three public sector participants). In general, the

evidence suggests that sector and firm size both have an impact on the level of adoption

of SCM and could, therefore, be regarded at one level as critical success factors.

However, the author recognises that supply chain managers are likely to have little, if

any, influence over such demographic factors. It should be emphasised, therefore, that

while these factors appear to have influenced SCM adoption levels to date, they should

not be regarded in themselves as inhibitors to success. Indeed, the relatively low of

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diffusion of SCM principles in smaller firms in the “traditional” sectors suggests that a

latent development potential exists in such firms.

The next issue in the second cluster relates to the culture of a firm and its managers and

– in particular – what might be best described as its managerial focus. The empirical

findings raise two separate but interdependent issues in this regard. The first relates to

the distinction between strategic and tactical foci on SCM. The deliberations of FG3

were particularly instructive in this regard. The most senior participant and the only one

with genuine end-to-end supply chain responsibility (MAN6) asserted that SCM is first

and foremost a strategic issue. He also pointed to some of the inherent dangers in

adopting a mainly tactical or operational focus. As noted in section 5.2.3, these

assertions found strong resonance in the group. In a similar vein, several participants in

FG3 (notably MAN8) provided examples that illustrated the role of SCM as a source of

strategic differentiation. Despite this recognition of the strategic nature of SCM, all

participants expressed a degree of frustration with their lack of involvement in the more

strategic dimension of the subject. This lack of strategic focus is also evident in the

questionnaire survey findings with the data suggesting that: (i) a minority of firms

(35.6%) formulate objectives that relate specifically to supply chain investment; and,

(ii) a minority of past and planned improvement initiatives could be regarded as

strategic or chain-wide. In line with the foregoing, the role of leadership and senior

management in developing appropriate supply chain strategies was emphasised

throughout the discussions of FG1 and FG3 (see section 5.4.3). These findings suggest

that the adoption of a strategic focus in relation to SCM is a critical success factor. The

corollary of this is that the adoption of a primarily operational or tactical approach is an

inhibitor to success. The second focus issue relates to the relative emphasis of firms on

“soft-wiring” and “hard-wiring” as discussed in section 2.11.5. This is clearly illustrated

in relation to the past and planned improvement initiatives of survey respondents. Just

three of the 70 usable responses received referred specifically to a people dimension in

their past improvement initiatives. In relation to planned future initiatives, technology-

oriented improvements are easily the most common. In line with the foregoing, the role

of employee involvement and “buy-in” to the supply chain change process was

emphasised throughout the discussions of FG1 and FG3 (see section 5.4.3). There was

broad agreement that these people-related issues should be at the core of any

worthwhile definition of SCM. The relative neglect of the people dimension (i.e. the

“soft-wiring”) would appear to be an inhibitor to success, i.e. the critical success factor

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is the appropriate incorporation of “soft-wiring” considerations into supply chain

decision making. As noted in section 2.11.5, the development of appropriate knowledge

and skills (see below) plays a key role both in shaping the orientation of managers and

in addressing these “soft-wiring” considerations.

Key Enablers

The final cluster relates to issues that could be regarded as key enablers of SCM. The

first of these concerns SCM knowledge and skills. This issue was raised by a number of

interviewees during phase I of the empirical research with a strong focus on the

importance of education and training development. As noted in section 4.4.4, 3PL1 had

a particularly strong emphasis on the need for the education process to develop more

clarity of understanding of the supply chain and its mechanics. When survey

respondents were asked to suggest possible policy initiatives that could be adopted to

facilitate wider adoption of SCM, by far the most common response type related to

education and training (see section 6.4.6). These findings suggest that the development

of the requisite skills and knowledge through appropriate education and training is a

critical success factor. As noted in the context of the focussed interviews in section

4.4.4, it also raises issues in relation to supply chain learning – the leveraging the supply

chain as a mechanism to enable learning and competence development (see: Bessant et

al, 2003; Sweeney et al, 2005). Section 2.11.5 suggested that this area is still in need of

development.

The next significant issue to emerge as a critical success factor from the various phases

of the author’s empirical work relates to the management of information flows and ICT.

There was a strong emphasis in the focussed interviews on information flow

management (see table 4.1). However, the role of technology and ICT tools was not

specifically mentioned by any interviewee. In FG1, all participants agreed the

information flow management was a central issue in SCM with several providing an

overview of the ICT systems used in their organizations. The discussion of FG2 resulted

in the general consensus that management of the key flows – including information

flows – provides the basis for effective supply chain control. FG3 participants were also

broadly in agreement in relation to the importance of information flow management.

The survey questionnaire findings are interesting in this regard. The importance of

information flows was generally acknowledged but a significant number of respondents

suggested that they were only “adequately” managed and that room for improvement

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exists in this area. Furthermore, the analysis in section 6.4.8 suggested that the way in

which information flows are managed, rather than the specific ICT tools that are used, is

a key enabler of integration and, therefore, a critical success factor.

The importance of effective performance measurement was a recurring theme during

the focus group phase of the author’s empirical research. FG1 agreed that this was a key

enabler of continuous improvement. FG3 reinforced this view and agreed that

inappropriate KPIs can accentuate fragmentation between supply chain processes (both

internally and externally). The general consensus was that determining an appropriate

set of metrics is very dependent on the specific nature of a firm’s markets, customers

and cost drivers, as well as on other strategic imperatives. In line with this, the

questionnaire survey indicated that a wide range of parameters are measured in

respondents’ organisations. However (and as noted in section 6.4.9) there is there is

little evidence of any genuinely inter-organisational KPIs being used. These findings

reinforce the “what gets measured gets done” axiom (see section 2.9.4) and suggests

that the establishment of a robust and integrated supply chain performance measurement

system is a critical success factor.

Having described the various constituent elements of Figure 7.1 in some detail, it is

worth returning to the totality of what this schematic represents. The top cluster

(“Business and Supply Chain Environment”) recognises that there are issues beyond the

boundary of the firm that critically impact on SCM adoption. These are part of what

Kotzab et al. (2011) refer to as “joint or external SCM conditions” based on their

analysis of ten different frames of reference38 “to determine the constitutional or

antecedent elements of SCM adoption and execution” (p. 233). In practice, this suggests

that managers need to at least have an understanding of these external issues and the

way in which they influence the SCM-readiness of a particular organization. The second

cluster (“Company and Management Characteristics”) highlights the need for a

customer-focused strategic response that recognises the importance of the people

dimension and the attendant need to develop appropriate knowledge and skills. These

are part of what Kotzab et al. (2011) refer to as “internal SCM conditions” as they

reside inside an organization. The bottom cluster (“Key Enablers”) focuses on two of

the critical enablers of the supply chain change management process.

38 Including those of Bechtel and Jayaram (1997), Fawcett and Magnan (2001), Mentzer et al. (2001) and Kotzab et al. (2006)

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The approach inferred in Figure 7.1 shares some characteristics with Gattorna’s

strategic alignment model (Gattorna, 2003) introduced in section 2.2.4 and shown in

Figure 2.3. The top-level linkages are shown in Figure 7.2 (below).

Figure 7.2: Critical Success Factors and the Strategic Alignment Model

The “rules (of the game)” come from the dynamics of the business and supply chain

environment, in particular from a firm’s understanding of customer and market

requirements. The customer-focused strategic response (“playing the game”) depends

on the company’s characteristics and those of its management. The “internal

capabilities” of the firm (of which “culture” is key element) are also determined to a

large extent by these characteristics (in particular its approach to “human performance”

and other soft-wiring issues), as well as by some of the key information and

measurement enablers. Finally, the “shaping and creating” of a company’s culture and

its strategy depends on the focus of managers and, in particular, on their

strategic/tactical orientation.

7.2.4 RQ4 - What practical measures could be implemented at policy/supply

chain/firm level to improve the level of effective SCM adoption?

Developing insights into this question is primarily concerned with identifying the

implications of the author’s findings at policy, supply chain and firm levels. The

essence of this is to ensure that any practical measures proposed address the critical

success factors and/or inhibitors to success set out in Figure 7.1. This issue will be

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returned to in Chapter 8. This section focuses of issues that were specifically raised

during the various phases of author’s empirical work that suggest possible measures.

As part of the questionnaire survey, respondents were specifically asked about measures

that could be adopted to facilitate wider adoption of SCM with the results shown in

Figure 6.84. As noted in section 6.4.6, the most common response related to education

and training with several respondents suggesting that support be provided for such

initiatives. This, as well as the other four most common responses, is shown in Table

7.1 with an indication of the relevance of each at the three levels, i.e. policy, supply

chain and firm. These possible measures all found expression among phase I and II

informants to greater or lesser extents.

Table 7.1: Possible Measures to Improve SCM Adoption

As well as being the most common response from survey respondents, the issue of

knowledge and skill development was raised by a number of interviewees during phase

I of the empirical research with a strong focus on the importance of education and

training. There is a need for better programmes not just at firm level but also at supply

chain level where the concepts of supply chain learning and the learning supply chain

have potential. As suggested by survey respondents, the provision of Government

support for such initiatives could have a positive impact. The recognition issue raised by

some survey respondents reflects the frustration articulated by FG3 in relation to the

status (or perceived status) of supply chain professionals in organisations. Cousins et al.

(2006) referred to the feeling among practitioners that they have something of value to

add and the attendant “underlying frustration or perception of being largely ignored” (p.

699). This in turn relates to the predominantly operational or tactical SCM focus of

many firms as discussed in section 7.2.3. Addressing this issue requires change in terms

of how firms consider SCM as part of strategy formulation and implementation

processes (see, for example: Christopher and Gattorna, 2005; Simchi-Levi and

Kaminsky, 2003; van Hoek and Harrison, 2004). Several focus group participants and

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survey respondents recognised the important role of technology – ICT in particular –

and expressed concern at the challenges presented by the rapid rate of technological

development. This is not only an issue at firm level as connectivity with other supply

chain actors is a key issue. As pointed out by a number of survey respondents, this may

be an area where Government support of some kind might be beneficial. The strong

focus on green issues among the focus groups resulted in the author’s Four

Fundamentals construct being refined to incorporate a specific focus on the

establishment of supply chain objectives that relate to environmental sustainability. This

is clearly an issue for individual firms as well as one that could be facilitated by

collaboration between supply chain actors. Possible Government support for policy

initiatives in this area was again suggested by a number of survey respondents. Finally,

there may be some scope – as suggested by a number of survey respondents – for policy

initiatives that help companies to better understand the dynamics of those markets that

they are trying to serve. This could help firms to exploit the potential afforded by easier

access to global markets. It was noted in section 1.3 that the export sector in Ireland has

proven remarkably resilient during the recent difficult economic period. Interestingly,

this success remains largely confined to established export markets in Europe and North

America (IEA, 2011). Achieving similar levels of success in rapidly growing emerging

markets could be assisted by policy initiatives that provide firms with information about

the dynamics of these markets.

7.3 Integrating Empirical Findings with the Literat ure

This section integrates the findings from the author’s empirical research with the

existing body of scholarly knowledge in the SCM field. It does so by relating the

empirical research findings to: (i) the author’s Four Fundamentals construct (section

7.3.1); and, (ii) other relevant themes from the literature review in Chapter 2 (section

7.3.2). The former enables a description of how this construct was refined to reflect the

empirical evidence, while the latter ensures that the empirical findings are linked to key

contemporary issues and debates in the extant literature.

7.3.1 Empirical Findings and the Four Fundamentals

This section relates the main findings from the three phases of the empirical work back

to the extant literature using the author’s Four Fundamentals definitional construct as a

basis. This construct was developed based on the author’s review of the literature

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described in Chapter 2 and, therefore, provides a logical framework for relating the

empirical findings to the existing body of scholarly knowledge in this field.

Furthermore, the adoption of this approach facilitates a description of how the construct

has been refined based on the main empirical findings.

It should firstly be noted that the need for a definitional construct was justified based on

a wide variety of literature (including but not limited to: Burgess et al., 2006; Kathawala

and Abdou, 2003; Stock and Boyer, 2009) as set out in detail in section 2.7. Such a need

was reinforced through all three stages of the author’s empirical research. There was

divergence of opinion across the six interviewees in phase I in relation to what the

supply chain and SCM entails. As noted in section 4.4.5, this was also the case in the

earlier study of Lummus et al. (2001) and reinforces the need for definitional clarity.

Discussion within all three focus groups in phase II also pointed to the need for

linguistic and technical consistency. The findings from the questionnaire survey

suggested that a wide range of terminology and emphases is evident in terms of how

SCM is understood and applied. Indeed, analysis across the three phases of the

empirical research led to the author proposing the need for a common understanding of

SCM as a critical success factor in putting theory into practice (see section 7.2.3). It

should also be noted that the development of any generic definition of the kind

proposed by the author is difficult given the varying dynamics at work in different firms

and across different sectors. This point was emphasised by informants across the three

phases of the author’s empirical work, most notably in the focus group sessions.

Figure 7.3 shows how the author’s proposed definitional construct – the Four

Fundamentals – has evolved and developed through the various phases of the empirical

research described in this thesis. The literature review highlighted the need for

definitional clarity in relation to SCM and informed initial construct development. The

construct’s components were described in detail in sections 2.8 to 2.11 and are

summarised in Table 3.5. As noted in section 4.4, cross-mapping the responses of the

phase I interviewees with the Four Fundamentals provides some confidence that the

construct largely achieves its primary aim of concisely, yet comprehensively, defining

the essence of SCM. Notwithstanding the difficulties associated with the development

of a generic definition, the approach described by all interviewees was broadly in line

with – and some responses virtually indistinguishable from – the essence of the

construct. Thus, phase I of the author’s empirical work provided confirmation of both

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the need for, as well as the essence of, the Four Fundamentals. Phase II of the work

provided further confirmation of the construct’s validity with the great majority of the

13 key constituent concepts captured in Table 3.5 alluded to by participants across the

three focus groups when describing SCM. Indeed, a number of issues not explicitly

captured in the Four Fundamentals were highlighted by participants. Based on the

analysis in section 5.4.3, the major refinement to the construct involved adding a

specific SCM objective in relation to environmental sustainability. Based on the work of

the Brundtland Commission (1987), the author defines a sustainable supply chain in this

context as one that meets the needs of the present without compromising the ability of

future generations to meet their own needs (see section 5.4.3). The analysis of the

survey data generated during phase III of the empirical work focused chiefly on

answering RQ2. However, the data did not reveal anything of significance that could be

regarded as invalidating in any way the essence of the Four Fundamentals. In this way,

the validity of the construct has been tested in a deductive manner based on a large data

set.

Figure 7.3: Evolution of Four Fundamentals Concept

The need for the adoption of more strategic approaches to SCM was highlighted as part

of the identification of critical success factors and/or inhibitors to success (see section

7.2.3). The Four Fundamentals provides a basis for addressing this important issue by

clearly positioning SCM within the overall corporate framework. As noted in section

2.8.5, the adoption of clear objectives as advocated by Fundamental One and the

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attendant use of “margin-to-serve” thinking (see, for example, Guerriero et al., 2008)

also addresses this issue by making SCM a key element of corporate marketing

planning. The extant literature identifies some barriers to more effective inter-firm

integration. As noted in section 2.9.5, Forslund and Jonsson (2009) suggest that lack of

trust and poor communication structures can act as obstacles. This is in line with the

author’s identification of the people dimension (i.e. the “soft-wiring”) and effective

information management respectively as critical success factors. In view of the

“understanding into action conundrum” or “implementation deficit disorder” discussed

earlier, the author suggests that Fundamental Three is vital as it provides a rational basis

for putting the philosophy of SCM – as outlined in Fundamental Two – into operational

practice. As argued in section 2.10.5, it highlights the specific activities that need to

take place, and places a strong emphasis on the need for an integrated and holistic

approach to their management. In relation to Fundamental Four, section 2.11.6

suggested that one of the biggest manifestations of the application of SCM in recent

years has involved the move away from adversarial relationships with key external

suppliers towards relationships which are based on mutual trust and benefits, openness

and shared goals and objectives (see, for example: Ellinger, 2002; Harland et al., 1999).

This is supported by the survey findings with respondents assessing supplier

relationships as relatively strong. This is compatible with respondents ranking supplier

integration as the most important form of integration, as well as with their assessment

that levels of integration with key suppliers are relatively high.

A final reflection on the Four Fundamentals construct in the light of the empirical

evidence relates to the perceived relative importance of the four constituent

components. The data in Figure 6.30 showed that almost three quarters of questionnaire

respondents alluded to the need for different links in the supply chain to work together

properly in line with the SCI concept articulated in Fundamental Two. This reflects the

centrality of this thinking in SCM. 29.8% of respondents made reference to supply

chain objectives and, more specifically, the need to optimise customer service and/or

cost performance (as outlined in Fundamental One). Approximately one quarter of

respondents alluded to the management of flows as set out in Fundamental Three. Just

13.7% of respondents made specific reference to the notion of relationships between

actors in the supply chain. This relative lack of emphasis on relationships and their

management is also reflected in the focus group findings with most groups not

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specifically alluding to the key constituent components of Fundamental Four (see Table

5.4).

7.3.2 Empirical Findings and the Literature Review

There was recognition by informants of the main trends in the evolving SCM context

across all three phases of the empirical work as discussed in section 2.2. For example,

the trend towards outsourcing of supply chain functionality and the concomitant vertical

disintegration of supply chain architectures was highlighted by FG2. The questionnaire

survey data indicates that outsourcing of various kinds has been implemented by many

firms in the context of organisational re-design. It was argued in section 2.2.5 that an

increasing number of companies are coming to regard the supply chain as a source of

strategic leverage. The empirical evidence suggested that this notion was widely

understood by informants but not necessarily widely adopted in their companies. In

general, the relatively high level of understanding of SCM among informants reflects

the fact that the focus on the need for more robust approaches to supply chain design

and management has sharpened in recent years (see, for example: van Hoek and

Harrison, 2004; Cohen and Roussel, 2004; Sun et al., 2009).

Section 2.3 described the key lessons from SCM’s historical evolution. The key lessons

from this evolution (see section 2.3.4) are all recognised explicitly in the author’s list of

critical success factors/inhibitors to success illustrated in Figure 7.1. These include:

(i) the need for a strong focus on customer requirements in the light of

increasingly sophisticated markets and discerning customers (see, for example,

Christopher, 2000);

(ii) the need for a strong management focus if the constituent elements of supply

chain functionality are to be integrated (see, for example, Fabbe-Costes and

Jahre, 2007); and,

(iii) the importance of information management as a key enabler in improving

customer service performance (see, for example, Blankey, 2008).

It was further argued in section 2.3 that the work of Gattorna et al. (2003), in particular

the performance/capability continuum (see Figure 2.5), provides a useful conceptual

overview which mirrors SCM historical evolution in many respects. The author’s

interpretation of the findings from his questionnaire survey suggests that very few firms

are at the “synchronisation” stage on the horizontal axis. A minority are at the

“collaboration” stage, with the majority at the “process” stage and a significant number

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still at the “function” stage. The implication here is that significant room for

improvement remains for the great majority of firms.

Section 2.4.4 synthesised some key lessons from a number of definitions of SCM that

have been developed over the years. The first lesson was that the plethora of definitions

may, of itself, represent a limitation (Ross, 1998: New, 1997; Stock and Boyer, 2009).

The author’s Four Fundamentals construct represents an attempt to address this issue.

The need for effective management of relationships was an important theme in the

literature – this is addressed in Fundamental Four of the author’s construct, as well as

in several of the identified critical success factors and/or inhibitors to success in Figure

7.1. The incorporation of a focus on environmental sustainability recognises that reverse

logistics and other green approaches have – and are likely to continue to – become more

important (see, for example, Savitz, 2006; Srivastava, 2007).

It was argued in section 2.5.4 that the adoption of thinking captured in the various

descriptions of the SCM paradigm shifts introduced in section 2.5 has the potential to

have a profound impact on the nature of strategic thinking in companies of all kinds.

However, the extent to which this thinking has been adopted – or even is understood –

in practice is unclear. The author’s empirical work – particularly the questionnaire

survey – provides a comprehensive profile of the extent of adoption in Ireland. As noted

in section 7.2.2 (above), this reveals a mixed picture reinforcing the view of Leenders et

al. (2002) and Christopher (1992) that “leading edge” companies may have adopted this

thinking to varying degrees but that there is a need for improvement in this context

across the wider business community.

Section 2.6 argued that, while there is general agreement about the lack of theory in the

field of SCM, there is little consensus about how this deficiency can be best addressed.

As suggested previously, the author’s Four Fundamentals goes somewhat further than

its intended definitional focus but does not purport to represent a “unified” theory.

However, it does provide the definitional clarity upon which meaningful development

of such a theory appears to be predicated. In relation to the core concept of integration,

the survey findings challenge the conventional wisdom that – as stated by Kotzab et al.

(2011) and others – that internal supply chain orientation (SCO) is a pre-requisite to

higher levels of process integration with suppliers and customers.

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Section 2.7 provided a justification from the extant literature for the development of a

concise and comprehensive definition of SCM, with sections 2.8 to 2.11 describing the

essence of the author’s proposed Four Fundamentals construct and section 2.12

providing some reflections on the construct based on a range of literature. Section 7.3.1

(above) describes how the construct was confirmed, refined and tested during the three

phases of the author’s empirical research. The role of logistics and other antecedents of

SCM were described in section 2.13. The author’s model of the relationship between

logistics and SCM (see Figure 4.3), as an integral part of the wider Four Fundamentals

construct, is based on the findings from phase I of the empirical work and provides

some clarity on this key issue.

The author’s comparison in section 2.14 of the Four Fundamentals with some of the

practical guidelines, constructs and idealised schemas of SCM indicates that the

construct goes beyond a purely definitional focus (Lummus and Vokurka, 1999;

Burgess et al., 2006; Storey et al., 2006). This is reflected in some of the findings from

phase II of the empirical work where several issues that go beyond the author’s primary

definitional focus were raised but which yet find expression in the construct. For

example, the role of leadership and senior management in developing appropriate

supply chain strategies was emphasised in the discussions of FG1 and FG3, as was the

related issue of employee involvement and “buy-in” to the supply chain change and

improvement process. As noted in section 5.4.3, these issues digress from the purely

definitional focus that is the author’s primary emphasis and begin to provide some

insights into good SCM practice. Similarly, FG2 had a strong focus on the risk and

uncertainty that is a feature of today’s economic and business environment and the

related need for supply chains to be responsive and dynamic. As noted in section 5.4.3,

these are issues that will inevitably arise in any discussion of management practice in an

economic climate that is characterised by turbulence, volatility and uncertainty but the

issues that arise do not need to be specifically reflected in an SCM definitional

construct. A consensus also emerged from the discussions of FG2 that dynamism in this

context was more an issue of good supply chain practice rather than something that

needed to be explicitly captured in a definition of SCM. FG3’s discussion of the specific

question as to whether high levels of internal integration were a pre-requisite for

external integration is also straying away from a purely definitional focus into the realm

of good SCM practice. In short, several implicit and/or explicit concepts that are

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embraced by the Four Fundamentals provide a template of some key elements of good

practice.

A useful mechanism for relating the author’s findings to the extant literature is to return

to the work of those authors whose work most specifically and directly informed the

development of the overall RQs (see Figure 2.24). Notwithstanding the significant

differences evident from the author’s research amongst practitioners based on sector,

firm size, ownership and respondent background, the level of understanding of core

SCM concepts was generally quite high. This is at odds with the assertion of Kathawala

and Abdou (2003) that a “high degree of variability” exists about what is meant by

SCM. This variability, as well as the “confusion and ambiguity” (Mentzer, 2001) and

the “great deal of confusion” referred to by Lambert (2004), is in general a reflection of

the lack of definitional consensus that is evident in the academic literature. The author’s

empirical evidence suggests that a much lower level of variability, confusion and

ambiguity exists amongst practitioners. This supports the views of Voss et al. (2002)

and Lambert and Cooper (2000) that the development of the SCM field has to a great

extent been practitioner-led, with theory largely following practice. The author’s

findings suggest that developments in the field have been following the practice in what

Leenders et al. (2002) called “leading edge” companies. This in turn supports the view

of Burgess et al. (2006) that SCM theory has been largely developed on the basis of

experience in a small number of industry sectors.

However, the mixed picture that author’s empirical research reveals – particularly from

the questionnaire survey – strongly supports the views of Storey et al. (2006) that

“predominant practice is at considerable odds with this conceptualisation”, as well as

those of Fabbe-Costes and Jahre (2007) in relation to the divergence between the

rhetoric and reality of SCI. The view of New (1997) that a “normative tension” exists

between the “is and the ought” is also borne out by the author’s findings. In this context,

the “is” relates to what is actually happening in practice, while the “ought” relates to

what is referred to by Storey et al. (2006, p. 755) as the “relatively coherent and

compelling prescriptive narrative” offered by the SCM concept. In short, the author’s

work supports the view that this narrative is based on the practices of a relatively small

number of firms in a relatively small number of sectors but is understood – at least

conceptually – across a much wider swathe of business and industry. The challenge

relates to how this narrative can be embraced in a practical way by the large number of

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firms for which SCM offers the potential to significantly add customer and shareholder

value in the context of the rapidly changing business environment.

The author’s empirical research supports the view of Skjoett-Larsen (1999, p. 51) that

“nothing is more practical than a good theory” if this “understanding into action

conundrum” or “implementation deficit disorder” is to be addressed. The author’s work

contributes to the development of such a theory through the identification of some of

the CSFs and/or inhibitors to success (see Figure 7.1). This answers the call of Lambert

and Cooper (2000) and Mentzer at al. (2001) for researchers to provide “guidance” to

practitioners in terms of SCM implementation. Most pertinently, the author’s work

provides some answers to the call of Stank et al. (2011, p. 941) to “separate truth from

hype” through the generation of “deeper insights into complex, multidimensional SCM

concepts”.

The author’s work supports the view of Halldorsson et al. (2007) that there is “no such

thing as a ‘unified theory of SCM’” (p. 292). As noted in section 2.14, it is debatable

whether it is either possible or desirable to develop such a theory. Nonetheless, the

author’s Four Fundamentals provides a basis for definitional clarity and consensus –

what Stock and Boyer (2009) termed a “consensus definition” – as well as for the

development of theoretical constructs that will provide a more comprehensive

understanding of SCM in all its facets. Its extension beyond a purely definitional focus

facilitates the latter and is line with the call of Fawcett and Waller (2011) for theory

which both resolves current challenges and takes advantage of emerging opportunities.

Combined with the author’s model of the relationship between SCM and logistics (see

Figure 4.3) and the identified CSFs and/or inhibitors to success (see Figure 7.1), this

could be further built upon in the development of new theory that facilitates a deeper

and richer understanding of SCM.

7.4 Summary and Conclusion

This chapter explored the author’s empirical findings from the three phases of the

research in a holistic and integrated manner in line with the concept of methodological

pluralism. Is has also linked key findings from the empirical research to the existing

body of scholarly knowledge and, more specifically, to the author’s Four Fundamentals

construct.

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There is no shortage of perspectives on possible future directions for SCM as an

academic discipline, as well as for supply chains in practice. In this context, two

insightful contributions are from Westbrook and New (2004) in relation to SCM as a

discipline and Christopher (2010) in relation to the likely characteristics of the

successful supply chains of the future. In a speculative manner, Westbrook and New

(2004) suggested four possible futures for SCM. The first possibility

(“marginalisation”) is that SCM has no future. The second possible future

(“realisation”) involves an increase in the practical adoption of SCM thinking, with

SCM becoming more reality than rhetoric. The third (“rationalisation”) involves

continuing rational development of the various elements of SCM. The final proposed

future is labeled “canonisation”. As the authors note:

This term refers here not to an elevation to the company of saints …. The sense of

canonisation here is one of entering the canon, the canon of approved modes of

thinking about business (Westbrook and New, 2004, p. 284).

Christopher (2005) highlights the shift from mass production and mass marketing

(“yesterday’s model”) to mass customisation (MC) and one-to-one marketing

(“tomorrow’s model”). He goes on to describe “seven major business transformations”

(p. 288), all of which have significant implications for the effective management of the

supply chains of the future. One of these transformations is that from stand-alone

competition to network rivalry. In this context, he notes that:

The companies that will be most successful in this era of network competition will

be those that are best able to utilise the resources and competencies of other

partners across the network (Christopher, 2010, p. 286).

Whilst there is evidence throughout this thesis of significant differences in the level of

diffusion of contemporary SCM concepts and practices across different sectors, the

author’s findings support the belief that SCM is unlikely to be either completely

marginalised or “canonised” in this era of network competition. Rather, further adoption

of existing theory in practice (“realisation”) and continuing development of SCM’s

constituent elements (“rationalisation”) is more likely. This is in line with the work

presented throughout this thesis. Indeed, the author’s work supports the development of

SCM thinking (i.e. “rationalisation”), which in turn makes its adoption in practice (i.e.

“realisation”) more likely.

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Chapter 8 goes on to summarise the main contributions of the research described both in

terms of the scholarly body of knowledge and methodologically, as well as to identify

key implications of the findings for practitioners and scholars.

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CHAPTER 8

GENERAL CONCLUSIONS, IMPLCATIONS AND SUGGESTIONS FO R

FURTHER WORK

8.1 Introduction

This final chapter summarises the main contributions of the research described in this

thesis (section 8.2), both in terms of the scholarly body of knowledge and

methodologically. It goes on to highlight some key implications (section 8.3), for both

supply chain practitioners and policy makers. The limitations of the work are

highlighted in section 8.4, leading directly to a number of suggestions for future

potentially fruitful research avenues in the field.

8.2 Contribution of the Research

This section summarises the main contributions of the research described in this thesis,

both to the existing scholarly body of knowledge in the field (8.2.1) and

methodologically (8.2.2).

8.2.1 Knowledge Contribution

The development of the author’s four research questions (RQs) was explained in section

2.15.4 based on the comprehensive literature review set out in Chapter 2. The

fundamental aim of this research was to disentangle the rhetoric from the reality in

relation to SCM adoption in practice in the specific context of Ireland. The major

contribution of the research lies in the insights into these questions generated from the

three phases of the empirical work. The integrated and holistic discussion of these

findings in section 7.2 (above) highlights these insights as they relate to each of the four

RQs. As noted in section 3.3.7, the author’s adoption of the Four Fundamentals

construct as a frame of reference, as well as the use of combinatory methodological

approaches, was aimed at ensuring that the work described in this thesis:

1. Is of practical value to practitioners and policy-makers by providing a detailed

understanding of the current SCM landscape in Ireland; and,



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In line with this, the main contributions of the research described in this thesis to the

scholarly body of knowledge in the SCM field relate to the:

1. Development of a profile of SCM understanding and adoption by firms in

Ireland (RQ1 and RQ2), as well as of the related critical success factors and/or

inhibitors to success (RQ3); and,

2. Development and refinement of the Four Fundamentals definitional construct.

This is in line with two of the possible futures for SCM articulated by Westbrook and

New (2004) and introduced in section 7.4. The former provides insights into the extent

to which SCM theory has been adopted in practice by firms in Ireland (i.e.

“realisation”); the latter supports the development of new thinking in the SCM field (i.e.

“rationalisation”). In addition to the above and in line with the focus of RQ4 (see

section 7.2.4), some managerial and policy implications have been identified based on a

synthesis of the empirical findings. This point will be returned to in section 8.3.

Profile of Understanding and Adoption of SCM in Ireland

As noted in section 2.15, the extant literature suggests that there is confusion and

ambiguity regarding exactly what SCM entails, as well as evidence that practice “is at

considerable odds with” theoretical conceptualisations (Storey et al., 2006, p. 755). It

was further noted that the extent to which SCM thinking has been adopted is unclear

apart perhaps from in a few leading edge companies (Christopher, 1992; Leenders et al.,

2002). This is particularly true in an Irish context where a very limited number of

studies have been undertaken to date. This dearth of studies is somewhat surprising

given the importance attached to supply chain issues in national economic and industrial

policy (see, for example, Forfas, 2012). A study conducted by the National Institute for

Transport and Logistics (NITL, 2005) formed the basis of a couple of academic papers

(Sweeney et al., 2008; Huber and Sweeney, 2007). A more recent study was carried out

by a market research company39 in conjunction with Accenture (Amarach, 2012).

However, both studies are very limited in scope and were aimed at addressing quite a

narrow range of issues. They both used convenience sampling approaches thus limiting

the validity of the findings.

The author’s empirical work provides insights into the level of understanding of SCM in

Ireland, with the questionnaire survey also providing a comprehensive profile of the

extent of adoption in Ireland. The key message from this is that, while levels of

39 Amarach Research (see Amarach, 2012)

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understanding appear to be quite high, the picture is more mixed in relation to actual

adoption (see sections 7.2.1 and 7.2.2). As noted in section 7.2.2, this suggests that an

“understanding into action conundrum” or an “implementation deficit disorder” exists.

The critical success factors and/or inhibitors to success derived from the empirical work

(see section 7.2.3) facilitate more informed decision making by practitioners and policy

makers thus providing a basis for addressing this challenge (see section 8.3).

As noted in section 2.15.3, many previous empirical studies have had quite a narrow

focus. Given the holistic and integrative nature of SCM, the author’s work deliberately

took a broad view. This ensures that the insights generated into the various RQs, as well

as the development and refinement of the Four Fundamentals construct (see below), are

based on as wide a range of perspectives as possible.

Definitional Construct

The need for SCM definitional clarity is a strong feature of the extant literature and is a

key theme in the author’s literature review (see, in particular, section 2.7). This

requirement is put perhaps most succinctly by Stock and Boyer (2009, p. 690) in their

statement that “an integrated definition of SCM would greatly benefit researchers’

efforts to study the phenomenon of SCM and those practitioners attempting to

implement SCM”. The author contends that his Four Fundamentals construct squarely

addresses this requirement. It was developed based on a wide range of literature and is

compatible with “important components of an integrated definition” proposed by Stock

and Boyer (2009, p. 690). The need for such a construct is evident from phases I and II

– and, albeit to a lesser extent, from phase III – of the author’s empirical work.

The empirical findings enabled the construct to be refined with: (i) the development and

incorporation of a model of the relationship between SCM and logistics based on the

focussed interviews of phase I; and, (ii) the incorporation of a sustainability focus into

the construct based on the focus groups of phase II. The former can be regarded as an

integral part of the wider Four Fundamentals construct and provides some clarity on

this key issue. The latter represents the increasing need for the adoption of a greener

perspective. The validity of the construct is confirmed by the data collected during all

three phases of the empirical work.

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The difficulties associated with the development of a generic definition were clear from

the literature review and these challenges were reinforced by informants during the

focussed interview and focus group phases of the empirical work. Notwithstanding

these difficulties, the findings suggest that the author has succeeded in his aim of

developing a construct that concisely, yet comprehensively, defines the essence of

SCM, and that is intelligible irrespective of functional background, business sector,

geography or level of seniority. However, to maximise the value of the construct in

practice it needs to be interpreted in a thoughtful way by practitioners so that the

particular dynamics and strategic imperatives of their industries are considered and

appropriately incorporated. For example (and as noted in section 2.11.6), there can be

no “one size fits all” approach in terms of determining the nature of internal and

external customer/supplier relationships. There are many possible relationship forms

and choosing the right ones in specific situations is the key to Fundamental Four. The

same is true in terms of how the other elements of the construct are interpreted and

used.

As noted in section 2.12, Fawcett and Magnan (2002, p. 359-360) suggested that “not

only do SCM practices lack cohesion and visibility but supply chain strategies lack

specificity and reach” as a result of the wide variety of SCM definitions. The author’s

construct, along with the model of the relationship between SCM and logistics (Figure

4.3) and the CSFs/inhibitors to success (see Figure 7.1), respond to the calls of several

scholars (notably: Lambert and Cooper (2000); Mentzer at al. (2001); Fawcett et al.,

2011) for researchers to provide “guidance” to practitioners in terms of SCM

implementation. In this way, the author’s work also makes a contribution to the

“cohesion and visibility” of practices, as well as to the “specificity and reach” of supply

chain strategies.

8.2.2 Methodological Contribution

The main contributions from a methodological and analytical perspective relate to the

adoption of a multi-paradigmatic positionality and the associated use of triangulation

and methodological pluralism. The latter raises specific issues in relation to emerging

(or dynamic) research designs. The relative lack of use of focus groups in previous

SCM research has resulted in a number of elements of good practice in the use of this

method being suggested by the author. Finally, the author’s analysis of the data

collected during phase III of the empirical research made use of a range of analytical

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techniques not often used in the research described in the extant literature. The

following sections describe some of these contributions and reflect on the author’s

experience in relation to each issue.

Research Philosophy and Positionality

As noted in section 3.2.2, the ontological and epistemological assumptions of

researchers impact strongly on the way in which research is carried out. The author’s

experience through the three phases of the empirical work suggests that the former is

particularly important given the array of language and metaphors that are often used to

explain supply chain concepts. The author’s use of a two-stage filtering process in the

analysis of phase I interview transcripts is an example of the attention to detail that is

required in this context. As noted in section 3.2.5, there has been extensive debate about

the relative merits of “pure” positivism and “pure” interpretivism and the extent to

which positionality in paradigmatic terms impacts upon the research process. Robson

(2002) refers to this debate as “so-called ‘paradigm wars’ endemic” (p. 43). The

majority of SCM and logistics research is “rightly or wrongly, primarily populated by

quantitative research viewed through a positivist lens” (Mangan et al., 2004, p. 575). In

relation to the research described in this thesis, the author’s approach was based on his

assertion that answering the research questions required that a range of philosophical

perspectives be adopted to ensure that the issues being studied are explored holistically

and that the disadvantages associated with the adoption of either purely positivist or

interpretivist positions are avoided. On reflection, he feels that this assertion was

accurate and that an approach based purely on either end of the positionality spectrum

could not have addressed the questions in a meaningful way. In this context, his

experience is fully in agreement with the views of Frankel et al. (2005) who suggested

that “good research is good research” (p. 205) and that in applied fields (such as SCM)

multiple kinds of good research should be used and good examples of the application of

different paradigms provided. The author calls on SCM researchers to consider the

benefits of multi-paradigmatic approaches as a means of expanding and enriching our

understanding. It is also clear from the empirical research that the development of a

better understanding of issues of philosophy and positionality is important if researchers

are to more effectively communicate with each other. As noted in section 3.2.6, failure

to communicate is often a result of the varying assumptions held by researchers about

their subject (see Mangan et al., 2004; Morgan and Smircich, 1980).

327

Triangulation and Methodological Pluralism

As noted above, answering the author’s research questions required that a range of

philosophical perspectives be adopted. This in turn drives the methodological approach

adopted – i.e. one that explores the research questions through an appropriate

combination of quantitative and qualitative methods. This is the basis of methodological

pluralism and adopts the concept of triangulation. The author’s experience suggests that

the RQs posed could not have been answered using either a purely qualitative or a

purely quantitative approach. Similarly, the combined use of inductive and deductive

approaches is the only way in which meaningful insights into the RQs could have been

generated. In section 3.3.7, the author emphasised that the use of multiple-method

approaches based on the triangulation principle is not in itself what methodological

pluralism is about. Rather, it is concerned with the effective use of a range of

appropriate methods as part of an integrated research design. The various

methodological approaches need to complement each other as integral elements of a

cohesive overall strategy. The author’s experience of carrying out the data collection

and analysis suggests that the words “integrated” and “cohesion” are vital in this regard.

As noted in section 3.5, each phase each phase of the empirical research aimed to

address one or two of the RQs specifically (as shown in Figure 3.5) but the research was

carefully designed so that all phases could potentially contribute to the generation of

insights into all RQs. The important point is that the cross-phase analysis be carried out

in an integrated and cohesive manner (see section 7.2.1). Figure 8.1 attempts to

illustrate this with specific reference to the role of different methods in enhancing

validity and reliability.

Figure 8.1: Complementarity of Methods

328

Phase I provided the author with relatively deep insights but the small number of

interviewees meant that the findings were quite narrow and, therefore, difficult to

generalise. In other words, the credibility (or internal validity) was relatively high, while

the transferability (or external validity) was relatively low. Phase II begins to add

somewhat more breath as the number of informants increases but the depth of

understanding that is developed reduces to some extent. Finally, the questionnaire

survey provided considerable breadth based on the 132 respondents, thus making

generalisability possible. In other words, the credibility (or internal validity) was

relatively low and the transferability (or external validity) relatively high. In this way,

the author’s research design – based on methodological pluralism and the use of

multiple methods – was capable of generating perspectives that were both credible and

transferable in a way which would not have been possible had a single method been

used.

Emerging Research Designs

This concept refers to the fact that when a variety of factors are being studied

simultaneously new issues will emerge during the research process. In other words, the

process is dynamic. While attention to detail is vital in designing any robust piece of

research there has to be a recognition that a degree of fluidity has to be built into the

overall approach. There are many examples of this in the author’s empirical work. For

example, the holding of four focus groups was planned for phase II of the empirical

work in the initial research design. However, just three were conducted based on the

related concepts of data and theoretical saturation. Another aspect of emerging or

dynamic research design is based on the notion that the various phases in the research

inform each other. One example of this from the author’s empirical work related to the

refinement of the Four Fundamentals construct to incorporate an environmental

dimension based on the focus group findings in phase II.

The Use of Focus Groups in SCM Research

The formal use of focus groups in SCM research is a relatively recent phenomenon. As

noted in Chapter 3, the author found the recent paper by Sanchez Rodrigues et al.

(2010) quite useful in terms of planning the focus group sessions. On reflection, the

composition of the focus groups – i.e. an attempt to combine the best elements of

homogeneous and heterogeneous groups – worked well and provided an effective

balance in terms of the discussions that took place. In terms of group size, the author’s

329

research used groups of different sizes and each delivered a different dynamic. These

different dynamics facilitated the generation of a range of different insights. The

author’s experience suggests that the role of the facilitator is crucial in managing the

larger groups but that need not be a major difficulty in practice. One final point of detail

in focus group execution relates the recording of discussions. Fully understanding the

implications of the various discussions would not have been possible without a

transcript. The author’s experience suggests that any initial participant misgivings in

relation to recording the sessions largely disappear once the discussion is underway.

Incidentally, the time-consuming nature of transcribing focus group sessions should be

recognised by researchers planning focus group sessions.

Analytical Techniques

As noted earlier, few existing SCM studies employ some of the analytical techniques

used in phase III of the present study. For example, the use of correspondence analysis

factor maps of the cross tabulations was useful in illustrating the relationships between

variables. In particular, this allowed the factors that contribute most strongly to

statistically significant relationships between demographic and other variables to be

identified in the absence of well defined a priori expectations as to the nature of such

relationships. The contingency approach also proved useful in compiling the results of

the various statistical tests that were carried out by the author (see, for example, Figure

6.97). This allowed the key dependencies to be viewed in a single model.

8.3 Implications

This section highlights some key implications from the author’s research, both for

supply chain practitioners (8.3.1) and for policy makers (8.3.2).

8.3.1 Managerial Implications

The implications for supply chain professionals at all levels from this research are many

and varied. The main ones are highlighted in this section with specific reference to the

critical success factors and/or inhibitors to success illustrated in Figure 7.1.

Firm Demographics

Differences in practices among firms of different sizes and in different sectors are to be

expected. In relation to sector, the competitive pressures that have resulted in the

330

relatively early adoption of SCM by firms in certain sectors are likely to become

prevalent across other sectors as competition intensifies over time. Interestingly, the

evidence suggests that the practical experience upon which SCM theory is based is

often confined to a relatively small number of key industry sectors. For example (and as

pointed out in section 2.15.2), Burgess et al. (2006, p. 707) observed that “a handful of

industry sectors” accounted for the majority of the literature with consumer goods

retailing, IT and automotive to the fore. Over time it is likely that more and more

sectors will be impacted by similar competitive pressures and that SCM adoption will

become more of a priority as a result. In terms of size, the author notices two

countervailing pressures at work. Firstly, larger firms are more likely to have access to

the financial and human resources necessary to develop and implement robust supply

chain strategies. Secondly, smaller firms may find the core SCM concept of integration

somewhat less relevant than their larger counterparts. The organisational fragmentation

that precipitated SCM’s origins is more likely to be a feature of the latter. Nonetheless,

the lessons from all components of the author’s Four Fundamentals construct found

resonance amongst key informants from smaller firms during phases I and II of the

empirical research suggesting that they have a potentially important role to play in the

improvement processes of SMEs.

Relative Power

It has long been recognised that the relative power of actors in supply chains has a

strong impact on the dynamic of the chain as a whole. For example, the long established

five forces model associated with Michael Porter is largely based on this notion (Porter,

1980). The key for supply chain professionals is to recognise where their firm fits in the

wider supply chain and to ensure that supply chain strategies and plans are based on

this. Indeed, SCM thinking forces managers to recognise that their companies are just

one link in a bigger network of actors and to think beyond the boundaries of their own

firms.

Need for Common Understanding

The various calls in the literature prompted the development of the author’s Four

Fundamentals construct. This construct, along with the author’s proposed model of the

link between SCM and logistics, has been specifically developed to facilitate the

collaborative approaches necessary for the improvement of overall supply chain

capability and performance. In arguing the need for a unified definition in section 2.7,

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the author noted that such a definition was aimed primarily at a practitioner audience

with precisely these challenges in mind. These and other related issues have been

discussed extensively elsewhere in this thesis.

Customer Focus

The supply chain’s ultimate objective – as recognised in Fundamental One – is to create

value. It is impossible, therefore, to think in any meaningful way about SCM without

having a strong focus on the evolving requirements of customers. This concept has long

been recognised in the SCM literature. The axiom that “the supply chain begins and

ends with the customer” recognises that – as illustrated in Figure 2.8 – an understanding

of customer requirements sets the specification for supply chain design and

management.

Managerial Focus

As noted in section 7.2.3, the focus of managers has a major impact on the extent to

which SCM is adopted in firms. The author’s findings suggest that managers need to

adopt a more strategic view which recognises the importance of the people dimension.

In line with the views of FG3 in particular, SCM needs to be proactive with a concern

for building supply chain capability in advance of the requirement (i.e. rather than being

primarily about reacting to periodic crises). The importance of the people dimension

simply recognises that the core SCM concept of integration is predicated on the building

of relationships, and that relationships are primarily about people. An overview of some

of the main elements of the people dimension is provided in section 2.11.5.

Key Enablers

The final cluster in Figure 7.1 relates to three of the key enablers of the supply chain

improvement process. As noted in section 2.2, the context and environment within

which supply chains operate have become more complex in recent years. The key

enablers, particularly ICT, have also been evolving at a rapid rate. The net result of

these and other factors is that the role of the supply chain professional at all levels has

become more knowledge- and skill-intensive. This has major implications for the

development of appropriate education and training programmes. The key issue for

practitioners is to develop planned approaches to SCM education and training that

ensure that the necessary knowledge and skills are in place as and when required. The

importance of information flow management and ICT, as well as of supply chain

332

performance measurement, has been the subject of much debate in the literature and

features quite strongly in the Four Fundamentals (see sections 2.10.4 and 2.9.4

respectively). The author’s empirical evidence reinforces their importance in putting

SCM theory into effective practice in the increasingly complex economic and business

environment.

8.3.2 Policy Implications

As with managerial implications, the implications for policy makers from this research

are many and varied. The main ones are highlighted in this section with specific

reference to the possible interventions that were suggested in an Irish context by survey

respondents as set out in Table 7.1 (above).

Education

Despite recognition of the importance of SCM and logistics as part of the Government’s

economic recovery plan – based largely on export-driven growth – there is little support

for education that is aimed at improving the knowledge and skill base of the supply

chain community. This issue could be addressed by bringing together the key

stakeholders (providers and customers) with a view to developing a more cohesive

approach in this area. In particular, education and training provision needs to be based

fundamentally on supporting higher levels of integration between actors rather than

accentuating fragmentation.

Technology

The rapid rate of development of technology in recent years makes it difficult for firms,

particularly SMEs, to even keep abreast of technology and its potential to contribute to

supply chain improvement. The work of Irish public bodies in this area has been

negligible to date. Bodies such as Enterprise Ireland, whose remit is concerned with the

development of indigenous enterprise (often SMEs), have a potentially important role in

this regard.

Environment

The impact of supply chain activities on environmental degradation is well documented.

Its increasing importance in an SCM context was evident from the author’s empirical

research and resulted in the Four Fundamentals construct being refined to incorporate

an environmental focus. However, firms appear to be unsure as to how this issue can be

333

best addressed. For example, none of the survey respondents implemented any specific

initiative in this area over the last two years and just two firms had plans to do so (see

section 6.4.6). Various Government departments and agencies are well placed to

provide practical support in this area both in terms of awareness creation and through

the provision of financial support for appropriate initiatives.

Market Information

As noted previously, the markets that firms are serving have become more complex and

customers have become more discerning. In addition, the changes which have taken

place in recent years in the international economic and business environment have

created opportunities for Irish firms beyond their traditional primary markets in the UK,

the EU and North America. However, the exploitation of these opportunities requires a

more detailed understanding of the dynamics of these markets. This is an area where

practical support could be provided for firms in the context of the national export-driven

growth strategy.

8.4 Research Limitations and Suggestions for Further Work

The main limitations of the work are highlighted in this section. This leads directly to

the identification of a number of potentially fruitful avenues for future research in the

field.

1. The author adopted a methodologically pluralist approach using focussed

interviews, focus groups and a questionnaire survey. This allowed useful insights

into the four RQs to be generated but did not allow the questions to be completely

answered in a definitive manner. Indeed the nature of the questions is such that

they can probably never be answered entirely definitively. Nonetheless, the

expansion of the research design to incorporate case studies, grounded theory and

action research has the potential to add significantly to the author’s findings.

While the use of case studies in SCM research has increased in recent years, the

need for more case study analysis in the field has been emphasised by several

scholars. Chow et al. (1994), as a result of some of the inherent limitations of

survey-based research, invited journal editors to encourage case study methods in

logistics and SCM research. Gammelgaard (2003), noting the lack of case

approaches in logistics research, analysed a selection of 17 case studies from

leading logistics/SCM journals to derive a framework for understanding and

334

conducting case analysis. Juga (2003) argued that if case studies in logistics

research are built on solid theoretical bases they can be considered a valuable tool

in stimulating the dialogue between practitioners and academics and in promoting

improvement in logistics competencies. Similarly, the use of grounded theory

(see section 3.3.6) and action research (see section 3.3.7) has the potential to

further enhance our understanding of the critical success factors and/or inhibitors

to the effective adoption of SCM theory in practice.

2. The author’s research (particularly that which relates to RQ1 and RQ2) provides a

profile of SCM understanding and adoption in Ireland at a particular point in

time. Different methodological approaches make it difficult to directly compare

the author’s finding with those of previous studies. It would be useful, therefore,

for longitudinal studies to be put into place so that a barometer of progress over

time could be developed.

3. The author’s focussed interviews in phase I were based on the work of Lummus

et al. (2001). However, direct comparison with the earlier study is difficult, not

least because the exact methodology employed in that study is not set out in

Lummus et al. (2001) with sufficient clarity or detail. There have been many calls

for replications in the literature (see, for example: Evanschitzky et al., 2007;

Neuliep, 1991) but their execution depends on the clarity of the research design

and methodology. In relation to replication, the author’s work was carried out in

Ireland. It would be interesting to replicate the study in other countries with a

view to identifying points of similarity and points of divergence. The detailed

description of the author’s research design in Chapter 3 allows such a replication

to be undertaken.

4. The author’s research design incorporated two specific components where

horizontal supply chains were studied (i.e. the manufacturing/3PL/retailer

configuration in the focussed interviews and the food industry chain that

comprised part of FG2). While the insights generated from these two components

were useful, the amount of work carried out by the author in this regard was very

limited. There is great potential to build on the insights generated by the current

research by establishing focus groups that represent horizontal chains. For

example, a group that was specifically designed with representatives from the

various links in the external supply chain depicted in Figure 2.13 (e.g. suppliers,

manufacturers, distributors, retailers, consumers) that was either industry-specific

or more general would provide useful information that would help to answer RQ3

335

and RQ4 more comprehensively. Other variations on this theme could include, for

example, detailed case studies with key informants from the case companies also

participating in focus group sessions.

5. The author’s definition of the population of firms to be studied in the

questionnaire survey was reduced from over 200,000 to 11,445 as a result of the

exclusion certain sectors and of micro enterprises. As noted in section 3.8, there is

an argument for regarding every firm as part of the population given that all firms

are part of a wider supply chain network. Such an approach is fraught with

difficulty – particularly in terms of identifying an appropriate sampling frame –

but would likely provide insights that had a wider applicability. The author

suggested in section 3.8.2 that a separate study be conducted of NACE A (i.e.

agriculture, forestry and fishing) firms. It is similarly suggested that a study be

carried out in NACE F (i.e. construction). Serious consideration was given to

inclusion of this sector in the current study given that there is evidence that it is

becoming more aware of the potential role of SCM. For example, Vrijhoef and

Koskela (2000) noted that:

The generic methodology offered by SCM contributes to better

understanding and resolution of basic problems in construction supply

chains, and gives directions for construction supply chain development (p.

169).

NACE A and F are large sectors in the Irish economy and represent over half of

the total number of firms in the country. However, the current limited coverage of

these categories could make the identification of an appropriate sampling frame

problematic.

6. Finally and as alluded to in section 7.3.2, several implicit and/or explicit concepts

that are embraced by the Four Fundamentals construct provide a template of

some key elements of good practice. The construct could, therefore, be further

built upon with a view to contributing to the development of new theory that

facilitates deeper and richer understanding of SCM.

336

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APPENDIX 1: SELECTED SCM LITERATURE

Source: Chen and Paulraj (2004b)

366

APPENDIX 2: SCOR MODEL

Source: Supply Chain Council (2005)

Figure 1: SCOR Process Reference Model Elements

Figure 2: SCOR Management Processes

367

Figure 3: SCOR Levels of Process Detail

368

APPENDIX 3: SCM DEFINITIONS

Source: Mentzer et al. (2001)

369

APPENDIX 4: SUPPLY CHAIN SCHOOLS OF THOUGHT

Source: Bechtel and Jayaram (1997)

Figure 1: Graphical Representation of Schools of Thought

370

Table 1: Authors Associated with Schools of Thought

371

APPENDIX 5: THEORIES OF THE FIRM – TOWARDS A UNIFIE D THEORY

OF LOGISTICS

Source: Mentzer et al. (2004)

Table 1: Economic Theories of the Firm

372

Table 2: Behavioural Theories of the Firm

Figure 1: A Unified Theory of Logistics

373

APPENDIX 6: SUPPLY CHAIN 2000 FRAMEWORK – SIX COMPE TENCIES

Source: Bowersox et al. (1999)

374

APPENDIX 7: REVIEW OF PREVIOUS EMPIRICAL STUDIES

Introduction

Over the past decade or more, much empirical research has been undertaken in the SCM

field. Indeed, and as noted earlier, much of the SCM literature could be classified as

being primarily empirical-descriptive (Croom et al., 2000). What this means is that

empirical research is carried out to assess the state of practice in relation to one or more

SCM domains and that this research is disseminated by describing the practices

uncovered. In other words, inductive work based on observed practice aimed at theory

building is often limited. In addition, whilst some papers attempt some form of

prescription of “best practice” based on observed practice most simply describe what

has been observed.

As part of his literature review for this thesis the author has conducted a comprehensive

analysis of much of the empirical research which has been published over the past

decade or so. A review of this nature could never be exhaustive; rather, the author has

attempted to select a representative sample of the work which has appeared in a range of

international peer-reviewed journals in recent years. Nonetheless, 90 empirical studies

have been reviewed. These studies represent a range of SCM domains over a period of

more than a decade. The focus was deliberately on work published in more recent years.

Given the rapid rate of development in this field in recent years more recently published

work is likely to be of more interest and benefit from both a technical and

methodological point of view. The geographical bases of the researchers and the

geographical scope of the studies are broad. Finally, the studies reviewed have

employed a range of research strategies and have been published in a relatively large

number of different journals.

SCM Domains

The papers reviewed covered a range of SCM domains (see Table 1 and Figure 1).

Before describing the categories it is worth noting that many of the papers are difficult

to classify into just one domain as they span a number of interrelated areas. In such

cases the primary objectives and focus of the paper was used as the basis for the

classification. Where a paper takes a broad strategic view of SCM and attempts to deal

with genuinely cross-functional and cross-company issues, then it is classified in the

“strategic” category (see below). The first three categories are based on the “buy-make-

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move-store-sell” model of the supply chain introduced earlier. The first category

(“buy”) includes research with a primary focus on procurement, purchasing and supplier

management aspects of SCM. The second category (“move/store”) relates to papers

which are mainly concerned with physical distribution (i.e. transportation and

warehousing) issues. The third category (“make”) includes the relatively small number

of papers which are concerned specifically with manufacturing (including production

planning and control) questions.

Table 1: SCM Domains in Empirical Studies

The next category (“quality”) contains papers which focus on the role of quality

management (including total quality management, quality systems and statistical quality

control) in the supply chain. A relatively large number of papers are included under the

next two categories (i.e. “technology” and “performance”). This reflects the

proliferation of interest in these two areas in recent years. The latter includes papers

which are concerned mainly with ICT application in the supply chain; the latter includes

papers which have performance measurement issues as the central theme. The largest

single group of papers is in the “strategy” category. In this context, the author has listed

papers which take a broad strategic view of SCM and attempt to deal with genuinely

cross-functional and cross-company issues. Many of the papers in this category are

concerned with relationship management issues. The “learning” domain includes papers

which relate to people, education, training and supply chain learning issues. There are

few papers in this domain but interestingly most were published quite recently, perhaps

reflecting the development of an interest in what is an emerging SCM area.

Domain Number

Buy 12

Move/Store 9

Make 3

Quality 4

Technology 9

Performance 7

Strategy 19

Learning 6

By Country 15

Other 6

Total 90

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SCM Domain Analysis

0

5

10

15

20

No. of paper s

Figure 1: SCM Domains in Empirical Studies

The final substantive category is “by country”. This comprises research which was

aimed chiefly at discovering the state of practice in particular geographical regions.

Finally, there are a number of papers which do not fit easily into any of the above

categories (“other”).

Trends Over Time

The data in Table 2 and Figure 2 show the number of papers considered in this review

in terms of date of publication. The data indicate a general upward trend during the

period in question. This is in line with the major bibliographic review of Charvet et al.

(2008) which concluded that the, “citation analysis indicates an explosion of interest

across disciplines and journals” (p. 64). It should be noted however that their study was

a broad-based review off all published papers in the SCM field; the current review is

restricted to empirical-based work. Their work also suggested that:

The explosion of interest may show signs of abating; however, it is too early to

tell. Clearly the exponential growth rate will inevitably plateau (p. 65).

The author’s review of the empirical studies shows no sign of this plateau effect with

the number of papers published in 2008 easily the highest of the thirtenn years under

consideration. However, as noted earlier the author deliberately focused on more recent

year which might explain this observed difference.

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Year Number

1996 1

1997 2

1998 2

1999 4

2000 2

2001 5

2002 7

2003 10

2004 5

2005 11

2006 11

2007 12

2008 18

Total 90

Table 2: Empirical Papers Published (1996-2008)

Papers Over Time

0

5

10

15

20

1995 2000 2005 2010

Number

Yea

r

Figure 2: Empirical Papers Published (1996-2008)

Sectors

The data in Table 3 and Figure 3 show the sectoral focus of the reviewed empirical

studies. Many papers (listed under “various”) incorporated a wide range of sectors. A

number of recent papers illustrate this breadth (for example: Ketikidis et al. (2008)

focused on “manufacturing and trading”; Toyli et al. (2008) on “manufacturing,

wholesale and retail”; Heide et al. (2008) on “trade and manufacturing”).

378

Table 3: Empirical Studies by Sector

A large number of papers have a focus on manufacturing organisations in general

(“various manufacturing”) which is perhaps not surprising given that much SCM theory

and practice has its origins in manufacturing. Some papers had a much narrower focus

(“specified sectors”) exploring particular industry sectors in some detail (for example:

Brun et al. (2008) examined the luxury fashion industry; Davila and Wouters (2007)

studied disk drive manufacturing; Korneliussen and Gronhaug (2003) focussed on the

salmon farming industry). A small number of studies were specifically concerned with

the retail and 3PL links in the supply chain. Two studies defied classification and are

listed under “other”: one (Halldorsson et al., 2008) was a postal questionnaire

administered to individual members of CSCMP while another (Al-Mudimigha et al.,

2004) is based on two case studies (a retail outlet and a public hospital). Four studies

did not specify the sector being researched.

Studies by Sector

Various

Various manufacturing

Specified sectors

Retail

3PL

Other

Not specified

Figure 3: Empirical Studies by Sector

There is some evidence that the practical experience upon which much SCM theory

relies is often confined to a relatively small number of key industry sectors (see, for

Sector Number

Various 36

Various manufacturing 30

Specified sectors 13

Retail 2

3PL 3

Other 2

Not specified 4

Total 90

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example, Burgess et al., 2006). However, this review indicates that empirical research

has been conducted across a broad base of sectors with a relatively small number of

papers from those sectors traditionally regarded as important.

Author Base and Geographical Scope

The data in Table 4 and Figure 4 shows the location in which the author(s) are based, as

stated in organisational affiliations listed in the papers.

Author Base Number

USA 22

UK 13

Scandinavia 10

Other European 13

Australasia 12

Transnational/Other 20

Total 90

Table 4: Empirical Research Author Base

Not surprisingly, the majority of authors are based in the USA or Europe. The relatively

high number of papers by Scandinavian40 scholars reflects the strength of SCM research

in that region.

Authors by Base

USA

UK

Scandinavia

Other European

Australasia

Transnational/Other

Figure 4: Empirical Research Author Base

The “transnational/other” category includes papers which are based on various types of

research collaborations. Firstly, several papers involve collaboration between authors

from developed countries (particularly the USA) and developed countries (e.g. Bhutta et

al. 2007; McCormack et al., 2008). Secondly, a number of papers are based on EU

40 In this context Scandinavia includes Norway, Sweden, Denmark and Finland.

380

supported collaborative research involving academics from various EU countries (e.g.

Carbone and de Martino, 2003; Evangelista and Sweeney, 2008). Thirdly, some

collaborative papers specifically aim to reflect the increasingly global nature of SCM

(e.g. Sila et al., 2006; Bagchi et al., 2005).

In terms of the geographical scope of the studies a similar picture emerges (see Table 5

and Figure 5). The majority of papers are concerned with practice in organisations based

in the USA or Europe, with a relatively large number based on Scandinavian practice.

Geographical Scope Number

North America (including

USA) 18

UK 10

Scandinavia 9

Other European 15

Australasia 18

Transnational/Other 20

Total 90

Table 5: Geographical Scope of Empirical Studies

However, it is also worth noting that researchers based in the USA, the UK and

Scandinavia tend to look beyond their geographical areas in terms of SCM research.

There are just 18 papers exploring practice in North America compared with 22 papers

by USA-based authors. Similarly, there are 10 papers which look at practice in the UK

but 13 by UK-based authors (the figures are 9 and 10 respectively for Scandinavia). For

example: the work of the USA-based Spekman et al. (1998) studies supplier partnering

issues in five industry groups in the Americas and Europe; the fieldwork described in

the paper of UK-based Mangan and Christopher (2005) was carried out in the UK, the

USA, the Netherlands and Ireland; the scope of Norway-based Korneliussen and

Gronhaug (2003) was Norway and Singapore.

381

Geogrpahical Scope North America (includingUSA)

UK

Scandinavia

Other European

Australasia

Transnational/Other

Figure 5 – Geographical Scope of Empirical Studies

Of the research in the “transnational/other” category, a number claim to be “global” in

scope (Choi and Hong, 2002; Frohlich and Westbrook, 2001; Davila and Wouters,

2007). The others often involve cross-country comparisons (for example, Szwejczewski

et al. (2001) in relation to supplier management in Germany and the UK and

Halldorsson et al. (2008 ) in relation to perceptions of SCM among managers in the

USA and Scandinavia) or studies of covering more than one country in the same region

(for example, Australia and new Zealand in the case of Mollenkopf and Dapiran, 2005

and the south-eastern European countries of Albania, Bulgaria, Macedonia, Greece,

Romania, Serbia and Montenegro in the case of Ketikidis et al., 2008).

Research Strategy

The data reported above indicates that a wide variety and SCM domains across a range

of sectors have been empirically studied over the last decade or so. Furthermore, the

studies have been based in variety of countries/regions internationally and carried out by

researchers based in various locations. The research strategies adopted by researchers

are also of interest, particularly in terms of the methodologies used for data collection,

samples sizes and response rates (where surveys were used) and the number of

companies studied (where case study approaches were adopted).

Data Collection Method

The data in Table 6 and Figure 6 are concerned with the research strategy adopted with

respect to the main approaches adopted in data collection.

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Table 6: Empirical Research Approach Adopted

The data indicate that quantitative surveys, administered by post or by web/email, are

by far the most widely used instrument for data collection. 54 studies used surveys as

the primary data collection mechanism. Single or multiple case studies were used by 18

authors, with seven using telephone or face-to-face interviews. Perhaps surprisingly,

just five papers reported the use of mixed methods.

Research Strategy

Mail or w eb survey

Case study

Interview s

Mixed

Other (including focus group)

Figure 6: Empirical Research Approach Adopted

Survey Sample Sizes and Response Rates

The great majority of the 54 studies reviewed which made use of surveys reported on

the size of the sample used and the response rate achieved41.

The sample sizes varied from the lowest which was 81 (Halldorsson et al., 2008)42 to

the highest which was 6000 (Hsu et al., 2008). The mean was 1131. The data in Figure

41 Both Frohlich and Westbrook (2001) and Narasimham and Kim (2002) reported number of responses but not the sample size used. 42 However, it should be noted that the sample size of 81 referred to the Scandinavian part of the survey; there was a sample size of 559 for the USA part of this comparative study.

Research Strategy Number

Mail or web survey 54

Case study 18

Interviews 7

Mixed 5

Other (including focus group) 6

Total 90

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7 shows the percentage breakdown of sample sizes. Perhaps most interestingly, the

great majority of papers provided no justification in terms of the size of sample adopted.

Empirical Survey Sample Sizes

10%

10%

15%

8%25%

19%

13%

3000-6000

2000-2999

1000-1999

750-999

500-749

250-499

0-249

Figure 7: Survey Sample Sizes

A relatively small number – four – of the studies reviewed specifically reported that an

email or web-based survey had been carried out. Given the relative ease with which

large numbers of potential respondents can be contacted using such mechanisms it is

perhaps surprising that the sample sizes in these four surveys were in ascending order:

2500 (McCormack et al., 2008), 2225 (Toyli et al., 2008), 1949 (Wu et al., 2006) and

300 (Ketikidis et al., 2008). This means, for example, that just two of the ten surveys

with the highest sample sizes specifically reported the use of email or web-based

approaches. This may be partly explained by authors not yet widely reporting that

specific use was made of these approaches.

In terms of response rate, they varied from the lowest which was 5.7% (Bagchi et al.,

2005) to the highest which was 70.9% (Spekman et al., 1998). In the case of the latter

study it is important to note that the sample was generated from a list of client firms

associated with the study’s sponsor, which probably accounts for the high response rate.

In other studies with unusually high response rates underlying factors of varying kinds

can in most cases be identified. The data in Figure 8 shows the breakdown of response

rates - the mean was 24.7%.

384

Empirical Survey Response Rates

13%

39%

17%

19%

12%

<10%

10-20%

20-30%

30-40%

>40%

Figure 8: Empirical Survey Response Rates

It is interesting to note that the majority of response rates are less than 20% with rates

between 10 and 20% (39% of the total) being most common. Finally, those studies

which specifically reported the use of email or web-based surveys (see above) had

response rates between 9.4% and 26.3%. This is relatively high given some of the

challenges associated with administering surveys of this kind (see, for example, Grant et

al. (2005)).

Case Study Methods

As noted earlier a minority of the empirical studies reviewed (18 in total) made use of

the case study methodology. A number of other studies which reported the use of

interviews, focus groups and mixed approaches also made use of case study approaches

to greater or lesser extents. Where case study approaches were used there was evidence

of variation in terms of the number of case companies studied. For example, seven of

the studies were based on a single company. In these cases a range of sectors (including

retail, automotive and elctronics) were studied. Where multiple cases were studied, in

some cases a number of companies in the same sector were examined (for example,

Brun et al. (2008) studied 12 companies in the luxury fashion sector) while others

involved multiple organisations across different sectors (for example, Gilmour (1999)

studied six packaged goods and three automotive companies). Several studies focussed

on inter-company supply chains (for example, Lambert and Cooper (2000) and Storey et

al. (2006)).

385

Journals

The empirical studies reviewed by the author appeared in a range of academic journals

(see Table 7 and Figure 9). The fact that almost 30 different journals are represented is

indicative of the broad interest in SCM across a range of disciplines. This is in line with

the findings of Charvet et al. (2008). The majority of these journals specialise in

logistics and SCM issues (i.e. IJPDLM, SCMIJ, IJLM, IJLRA and JBL). The others are

broader in scope (e.g. IJOPM) and/or specialise in fields related to logistics and SCM

(e.g. IMM).

Journal Number

International Journal of Physical Distribution and Logistics Management

(IJPDLM) 21

Supply Chain Management: An International Journal (SCMIJ) 14

International Journal of Logistics Management (IJLM) 9

International Journal of Operations and Production Management (IJOPM) 9

International Journal of Logistics: Research and Applications (IJLRA) 4

Industrial Marketing Management (IMM) 4

International Journal of Production Economics (IJPE) 4

International Journal of Management Science (IJMS) 3

Journal of Business Logistics (JBL) 2

European Journal of Operations Research (EJOR) 2

Others 18

Total 90

Table 7: Empirical Studies by Journal

Gibson et al. (2004) produced a “composite usefulness index” for a range of journals

based on a survey of US and European academics. It is interesting to note that:

• five out of the top six rated journals in Europe appear in Table 7 (the

exception being the Harvard Business Review); and

• three of the top five rated journals in the USA appear in Table 7 (the

exceptions being Supply Chain Management Review and the Harvard

Business Review).

386

Papers by Journal

0

5

10

15

20

25

IJPDLM

SCMIJ

IJLM

IJOPM

IJLR

AIM

MIJPE

IJMS

JBL

EJOR

Other

s

JournalN

um

ber

Series1

Figure 9: Empirical Studies by Journal

387

APPENDIX 8: SUMMARY OF PAPER USING FOCUS GROUP METHOD IN

LOGISTICS/SCM

Source: Sanchez Rodrigues et al. (2010)

388

389

APPENDIX 9: FOCUS GROUP PARTICIPANTS AND COMPANY PROFILES

Focus Group 1

Location: Dublin

Date: April 2010

Number of Participants: 12

Job Role Company Nationality Gender

Planner MAN1 Irish F

Senior Planner MAN2 Irish M

Head of Logistics and Supply Chain MAN3 Irish M

Customer Relationship Manager MAN4 British M

Planner MAN5 Irish M

Finance and Accounting Supervisor 3PL1 German M

Project Implementation Manager 3PL2 Irish M

Import Co-ordinator 3PL3 Polish F

Planner 3PL4 Irish M

Operations Manager 3PL5 Irish M

Product Services & Localization Manager SW1 French M

Logistics Officer PS1 Irish M

MAN1 is a US-headquartered manufacturer of electrical cabling for communications

networks. (approximately 200 employees in Ireland)

MAN2 , part of a larger group of companies, is a US-owned manufacturer of generic

pharmaceutical products. (approximately 360 employees in Ireland)

MAN3 plc is a leading premium drinks business with a wide range of international

brands across spirits, wine and beer. (approximately 360 employees in Ireland)

MAN4 plc is a leading manufacturer, marketer and distributor of branded beverages in

Ireland and the UK. (approximately 500 employees in Ireland)

390

MAN5 manufactures concentrates and beverage bases for bottling companies

throughout the world. (approximately 200 employees in this part of the Irish operation)

3PL1 is a large US-headquartered global package delivery company. (approximately

1,000 employees in Ireland)

3PL2 is part of the Irish operation of large international logistics group. (approximately

1,000 employees in Ireland)

3PL3 is a privately owned short-sea carrier whose Irish division provides services to

Eastern Europe. (approximately 10 employees in Ireland)

3PL4 is part of an Irish-owned group of companies and is involved in the distribution of

bulk fuels and related products throughout Europe. (approximately 260 employees)

3PL5 is a Dublin-based family owned and managed company that manufactures and

distributes a range of food products. (approximately 50 employees in Ireland)

SW1 is the Irish operation of a large global software company. (approximately 1,700

full-time and 700 full-time contract employees in Ireland)

PS1 encompasses the army, navy, air corps and reserve forces of Ireland.

(approximately 10,500 employees)

391

Focus Group 2

Location: Dublin

Date: October 2010

Number of Particpants: 10


Supply Chain Coordinator MAN1 Irish M

Quality Manager MAN6 Irish F

Logistics Operations Manager MAN7 Estonian M

Operations Manager 3PL6 Polish F

Operations Supervisor 3PL7 Latvian M

Transport Manager 3PL8 Irish M

Marketing and Bus Dev Manager 3PL9 British F

IS Consultant SW2 Danish M

Assistant Head of Department PS2 Irish M

Senior Buyer PS3 Irish F

MAN6 is the Irish subsidiary of a large international life sciences group headquartered

in the US. (It was winding down its Irish operations when the focus groups were

conducted; 460 employees in MAN6 at peak in 2007)

MAN7 is part of a large Irish multinational food company. (approximately 500

employees)

3PL6 is an Irish firm that provides a range of logistics services including air and sea

freight forwarding, national distribution, customs clearance and warehousing.

(approximately 10 employees)

3PL7 is a frozen food distributor and is part of a broad-based international group

(approximately 200 employees in Ireland)

392

3PL8’s primary business is wholesale food distribution to franchise operators under the

banner of a number of well know retail brands in Ireland. (approximately 1,500

employees)

3PL9 is an Asian food retailer, wholesaler and distributor. (approximately 100

employees)

SW2 is the Irish subsidiary of a leading player in the global IT industry. (approximately

100 employees in Ireland)

PS2 is the Dublin Institute of Technology (DIT), one of Ireland’s largest Higher

Education Institutions. (approximately 3,000 employees)

PS3 plc is a state-owned commercial company involved in the electricity business.

(approximately 270 employees)

393

Focus Group 3

Location: Cork

Date: November 2010

Number of Particpants: 6


Supply Chain Manager MAN6 Irish M

Senior Materials Manager MAN8 Irish M

Logistics Supervisor MAN9 Irish F

Account Management Supervisor MAN10 Icelandic F

IT Systems Analyst 3PL10 Irish M

Naval Lieutenant Commander PS1 Irish M

MAN8 was the Irish operation of a highly diversified global manufacturing company in

the security and safety sector. (Its manufacturing operations in Ireland were

discontinued and relocated to lower cost locations just prior to the focus group sessions;

475 employees in Ireland at peak in 2005)

MAN9 is a subsidiary of a US-headquartered international bioscience and

biopharmaceutical manufacturing firm. (approximately 500 employees in Ireland)

MAN10 is the Irish-based shared services centre of a manufacturer of high performance

cables (approximately 50 employees in Ireland)

3PL10 is a major global supply chain management firm that offers a variety of value-

added services to customers across a range of sectors (10,000 employees worldwide,

the majority in Ireland)

394

APPENDIX 10: IDENTIFICATION OF QUESTIONNAIRE DATA

REQUIREMENTS

1. Background and Rationale

Before investigating the each element of the Four Fundamentals construct in detail

there are a few background issues that are worth exploring. These are captured in the

first group of questions.

As noted in Chapter 2, a plethora of SCM definitions have been developed since the

term was first introduced in the early 1980s. However, and as discussed earlier (in

particular in section 2.7), there still appears to be some confusion as to what a supply

chain is and what SCM is. For example: Mentzer et al. (2001) suggested that “there

remains considerable confusion as to its meaning”; Lambert (2004) also used the word

‘confusion’ in this context by asserting that “there is a great deal of confusion regarding

exactly what SCM involves”; Kathawala and Abdou (2003) concluded that “there is a

high degree of variability in people’s minds about what is meant (by SCM)”. The first

question to be asked, therefore, is:

Q1A: What is meant by a supply chain and by supply chain management?

As pointed out in section 2.13.2, there are a number of different schools of thought

concerning the relationship between SCM and logistics. For example, Lummus et al.

(2001) noted that it is not always clear how logistics differs from SCM. Similarly,

Larson and Halldorsson (2004) pointed out that, “there is lack of agreement on how

SCM is related to logistics”. This leads to the following two questions:

Q1B: What is meant by logistics?

Q1C: What is the relationship between SCM and logistics?

The literature review in Chapter 2 also revealed that several scholars, including New

(1995) and Saunders (1995), contend that there is a confusing profusion of overlapping

terminologies and meanings. Tan (2001) noted that, “the literature is replete with

buzzwords”; Croom et al. (2000) also note that many labels can be found referring to

supply chain and to practices for SCM; Cousins et al. (2006) also noted the use of a

wide variety of terms and metaphors. This raises the following question:

395

Q1D: Does the language and terminology used to define SCM contribute to confusion in understanding?

Many of the SCM definitions in the literature attempt to provide short (often single-

sentence) definitions (see section 2.4). As pointed out in section 2.7, in the author’s

view, the results are, almost inevitably, achievements in verbal and linguistic dexterity

rather than definitions which are likely to add clarity from an SCM application

perspective. Thus, the following question is raised:

Q1E: Are single-sentence definitions of SCM of limited value?

In the introduction to Chapter 2, the author suggested that there is evidence of

differences in emphasis and approach between different functional backgrounds,

business sectors and geographical areas.

Regarding functional orientation, Tan (2001) noted that the SCM has evolved from both

a purchasing and supply perspective, as well as a transport and logistics perspective,

with both following quite separate paths. Indeed, the literature review in Chapter 2 is

based on work which has its origins in a diverse range of traditional disciplines, many

of which are functionally-oriented. As noted in section 2.1, these disciplines (and

associated functions) go beyond just purchasing (and supply) and transport (and

logistics). For example, Lejeune and Yakova (2005) suggested that SCM comprises

different inbound and outbound entities operating at various stages (i.e. procurement,

production, distribution) in the supply chain. Given the importance of internal chain

integration in the overall SCM paradigm (as captured in Fundamental Two – see section

2.9), any differences of emphasis between traditional functions may be significant.

With regard to business sectors, Burgess et al. (2006) suggest that most examples used

to illustrate SCM concepts are from a limited number of sectors (such as retailing, IT

and automotive) – see section 2.15.2. The author’s experience suggests that there are

differences in orientation and emphasis between these and other sectors when it comes

to defining SCM. This is to be expected given the different strategic challenges and

associated imperatives in different sectors. Furthermore, every sector tends to develop

its own language over time, often in a way which reflects these challenges and

imperatives.

396

In relation to geography, again there is some evidence of differences of emphasis

between countries. For example, Grant (2004) argued that North American researchers

and mangers in logistics and SCM tend to focus more on transactional than relational

issues in customer/supplier interaction, in contrast to their UK/European counterparts.

These differences may be accentuated by language and cultural factors. As discussed in

section 2.2.2 supply chains have become more international (and even global) in scope.

In this context, any differences in emphasis between countries may have a significant

impact on the design and management of international (or global) supply chain

architectures.

The discussion in the preceding paragraphs leads to the following question:

Q1F: Are there differences of emphasis based on (i) functional/professional

background, (ii) business sector, and (iii) geographical base?

2. Fundamental One

This section describes and justifies the detailed questions developed in relation to

Fundamental One (SCM objectives).

Background

This Fundamental is concerned with the main objectives of SCM – customer service

and cost/investment. Before exploring each of these two elements in detail there are a

couple of issues which are important.

It was argued in section 2.8.1 that the setting of objectives is of crucial importance for

any planning activity and is central to the successful creation and implementation of any

plan for several reasons. The management by objectives (MBO) has been written about

for many years (e.g. Albrecht 1979; Humble 1971) and continues to attract attention

(Aggarwala 2002). However, there has little empirical investigation into MBO is a

specific SCM context, thus raising the following question:

Q2A: To what extent are specific SCM objectives formulated?

Fundamental One suggests that the key SCM objectives are (see section 2.8.1):

• To meet or exceed the required or demanded customer service levels in targeted

markets/segments; and,

397

• To optimise total supply chain investment and cost.

This service/cost approach has long been regarded as central to SCM (Christopher

1992) – this lead initially to the next question:

Q2B: Do the two key SCM objectives relate to the market (i.e. customer service) and the financial (i.e. total supply chain cost and investment) dimensions of the

supply chain? The focus group work described in Chapter 5 resulted in a third SCM objective being

identified, i.e. environmental sustainability. In light of this, the question needs to be

modified to:

Q2B: Do the three key SCM objectives relate to the market (i.e. customer service), the financial (i.e. total supply chain cost and investment), and the environmental

(i.e. sustainability) dimensions of the supply chain? Customer Service

These questions relate specifically to the setting of customer service objectives.

Several authors have suggested that customer service is becoming a key source of

differentiation or an order winning criterion in many sectors (Christopher 2005). Indeed,

Faulkner (2007), based on experience of assessing customer requirements in a variety of

business sectors, argues that the importance of customer service relative to product

quality (now largely an order qualifier) and price (largely determined by the dynamics

of supply and demand in the market and subject to downward pressure in many sectors)

has increased. This raises questions about the role of customer service in practice?

Q3A: How important is customer service relative to price and quality?

The use of external and internal audits has been suggested by some authors (e.g.

Sterling and Lambert, 1989). The purpose of an external audit is primarily to understand

customer expectations and competition service levels. An internal audit is used to assess

the level of customer service provided and establish a benchmark against which changes

in service can be appraised. Faulkner (2007) described a detailed approach which he has

used as a consultant in several sectors. However, there is little empirical evidence about

the extent to which such audits are used in practice, thus raising the following question:

Q3B: To what extent are customer service audits used?

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There is some evidence that customer service is often quite narrowly interpreted by

firms. For example, Sterling and Lambert (1989) assessed earlier research and

concluded that many of the past studies in this area narrowly defined customer service

and failed to measure it from a customer’s point of view. Faulkner (2007) and NITL

(2001) made a similar point and went on to suggest that the phrase “customer service”

means something quite specific and well defined in an SCM context. This leads to the

next question:

Q3C: Is customer service interpreted narrowly?

Table 2.4 shows the suggested constituent elements of customer service, based on the

work of NITL (2001) and Faulkner (2007). As noted in section 2.8.2, most of these

overlap with the elements suggested by Grant (2004) based on the original work of

LaLonde and Zinszer (1976). The latter categorized the elements of customer service

into (i) pre-transactional, (ii) transactional, and (iii) post-transactional elements.

However, there has been little empirical investigation aimed at identifying the specific

elements of customer service and their relative importance. This leads to the next two

questions:

Q3D: What are the elements of customer service?

Q3E: What is the relative importance of these elements? Section 2.8.2 argued that SCM is not just about improving service as the title of

Christopher (1992) suggests. Rather the objective needs to be: to meet or exceed the

required or demanded customer service level in targeted markets/segments. This raises

the question:

Q3F: Is there a difference between “improving customer service” and “meeting

and/or exceeding the level of customer service required”?

Section 2.8.2 also argued that the key is to recognise that understanding customer

service requirements is the starting point in the supply chain design process (see Figure

2.8). The title of the paper by Korpela et al. (2001) ‘Customer Service Based Design of

the Supply Chain’ captures this approach very effectively. In a similar vein, Faulkner

(2007) argued that a market-driven customer service strategy – based on clearly

understood customer requirements – sets the specification for integrated SCM. This

leads to a question about the extent to which customer service levels ‘set the spec’ for

SCM/supply chain design in practice:

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Q3G: Does understanding the level of service required set the specification for

SCM/supply chain design?


These questions relate to financial objectives, i.e. those that relate specifically to the

optimisation of total supply chain cost and investment.

In section 2.8.3 the author argued that the emphasis must be on total supply chain costs.

The key issue is that a reduction in expenditure in one part of the supply chain (e.g.

purchasing) may result in an increase elsewhere (e.g. inventory holding costs). In line

with overall SCM philosophy it is important to take a supply chain wide view and to

recognise the inevitable trade-offs that need to be addressed, thus raising the following

question:

Q4A: Is the concept of total supply chain cost well understood?

It was further argued in section 2.8.3 that a trade-off approach to supply chain costing -

something which has been a feature of the literature for many years (see, e.g. Beckett

1967; Schiff 1972) - is central to the setting of SCM financial objectives. Ascertaining

the extent to which this occurs in practice is captured in the following question:

Q4B: To what extent is supply chain cost trade-off analysis used?

A number of supply chain costing methodologies were introduced in section 2.8.3.

These included direct product profitability (DPP), activity-based costing (ABC) and

total cost of ownership (TCO), as well as the supply chain costing model proposed by

La Londe and Pohlen (1996). However, there is a dearth of empirical evidence about the

extent to which methodologies such as these are used in practice, thus raising the

question:

Q4C: To what extent are supply chain costing methodologies used?

As noted in section 2.8.3 investment in supply chain capability aims to improve service

performance and/or reduce costs. As noted by New (1996) the expenditure involved can

be significant and needs to be subject to the usual investment appraisal processes to

assess its value to the firm. There is a significant body of empirical evidence about

investment appraisal and capital budgeting approaches used in firms, particularly in the

appraisal of investments in technology (see, for example: Small and Chen, 1996; Chan

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et al, 2001). However, there is no data in relation to investment in supply chain

capability, thus raising the question:

Q4D: How are supply chain investment opportunities appraised?

It was suggested in section 2.8.3 that the objective is not just about reducing costs as the

title of Christopher (1992) suggests. Rather the objective needs to be to optimise total

supply chain investment and cost. For example, it may be necessary to commit

investment to supply chain improvement and/or to increase operating costs to meet (or

exceed) customer service requirements. The following question is analogous to Q3F in

relation to customer service (see above):

Q4E: Is there a difference between “reducing costs” and “optimising total supply

chain cost and investment”?


It was noted earlier that at a conceptual level service and cost objectives may be seen as

being somewhat mutually exclusive. The following group of questions relate to this

apparent conundrum.

Stevens (1989) noted that the overall objective is to effect a balance between what are

often seen as conflicting goals of high customer service and low unit cost. The two

simple equations cited in Christopher and Towill (2000), and outlined in section 2.8.4,

provide a useful illustration of this issue and leads to the question:

Q5A: Are cost/investment and service optimisation perceived to be mutually

exclusive?

It was further argued in section 2.8.4 that value-based approaches, and time-based

approaches specifically, have the potential to support the simultaneous achievement of

cost/invest and customer service objectives. This leads to the following three related

questions being formulated:

Q5B: Is the concept of value understood?

Q5C: To what extent are value-based approaches used to support the simultaneous achievement of cost/investment and customer service objectives?

Q5D: To what extent are time-based approaches used to support the simultaneous achievement of cost/investment and customer service objectives?

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3. Fundamental Two


Fundamental Two (SCM philosophy).

Background

Before exploring internal and external integration in detail, there are a number of

general issues related to the supply chain integration (SCI) concept which are captured

in the following questions.

As discussed in detail in section 2.9.1 SCI is at the heart of SCM theory. Perhaps most

tellingly, Pagell (2004) declares that “in its essence the entire concept of SCM is really

predicated on integration” (p. 460). The extent to which this approach is adopted in

practice is unclear, thus raising the question:

Q6A: Does integration play a central role in SCM?

Several authors make reference to different types and levels of integration. For example:

the work of Fawcett and Magnan (2002) identified four levels of integration in practice;

Harland et al. (1999) classified research into four areas according to the level of

integration between supply chain activities. Similarly, Mentzer at al (2001) - in a theme

built upon by Kotzab et al. (2006) - distinguished between SCO and SCM. This

approach suggests that the concept of SCI can be interpreted and implemented in

different ways. This raises the question:

Q6B: What is the meaning of ‘integration’ in an SCM context?


There are a couple of questions which relate specifically to internal (i.e. intra-firm)

integration.

In the context of marketing/logistics interfaces specifically, the work Ellinger (2000), as

cited in section 2.9.2, recognises that despite its well documented advantages the extent

of internal integration is limited. The work of Sweeney et al. (2007) also suggests that

the perceived level of integration of SCM activities is relatively low. This leads to the

next question:

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Q7A: To what extent are internal supply chain activities integrated?

As further noted in section 2.9.2, there are some key organisational issues associated

with internal integration. For example: Monczka et al. (1998) stated that, “SCM requires

traditionally separate materials functions to report to an executive responsible for

coordinating the entire materials process”; Houlihan (1988) noted that, in an SCM

environment, “responsibility for the various segments of the supply chain is not

fragmented and relegated to functional areas such as manufacturing, purchasing,

distribution and sales”. In this context, Kim (2007) identifies different specific types of

organisational structures deployed in the logistics/supply chain arena. These points lead

directly to a fundamental organizational question:

Q7B: Who has overall responsibility for internal SCM/SCI?


As with internal integration, there are a couple of questions related to external (i.e. inter-

firm) integration. While ‘complete backward and forward integration’ - as postulated by

Fawcett and Magnan (2002) - might be viewed as the theoretical ideal, there is some

evidence to suggest that in reality various degrees of integration between upstream and

downstream organizations exist (see, for example: Frohlich and Westbrook, 2001; Bask

and Juga, 2001; Fabbe-Costes and Jahre, 2007; Fabbe-Costes and Jahre, 2008). The

formulated questions relate to upstream and downstream integration respectively:

Q8A: What is the level of integration with customers? Q8B: What is the level of integration with suppliers?


It was argued in section 2.9.4 that lack of integration is often a result of functions and

activities being measured in isolation from each other. However, the literature suggests

that there may be weaknesses in the practical implementation of robust and integrated

systems of supply chain KPIs. For example: Beamon (1999) suggested an excessive

emphasis on purely financial metrics; Gunasekaran and Tirtiroglu (2001) noted the lack

of a “balanced approach” and the lack of a “clear distinction between metrics at

strategic, tactical and operational levels” (p.72); Lambert and Pohlen (2001) suggested

that in many cases, so-called ‘supply chain metrics” were often internally focused

logistics measures, with a lack of focus on overall supply chain performance. The

following questions are concerned with supply chain performance measurement:

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Q9A: What supply chain KPIs are used?

Q9B: How are these KPIs used?

4. Fundamental Three


Fundamental Three (supply chain flow management).

Background

It was argued in section 2.10.1 that for a supply chain to achieve its maximum level of

effectiveness and efficiency, material flows, money flows and information flows

throughout the entire chain must be managed in an integrated and holistic manner,

driven by the overall service and financial objectives. However, Forrester (1958)

alluded to five flows (manpower and capital equipment being the additional two), with

Croom et al. (2000) also referring to five flows (knowledge and technology being the

additional two). Some authors focus on a smaller number of flows – for example,

Christopher and Ryals (1999) emphasise the importance of managing product (i.e.

material) and related information flows. Therefore, before exploring material, money

and information flows in detail, the following question relates to identifying the key

flows in the supply chain:

Q10A: What are the key supply chain flows?

Material/Money Flows

It was argued in section 2.10.1 that supply chain operations planning and control is, to a

large extent, concerned with the way in which material, money and information flows

are managed across the supply chain. The following questions are concerned with the

efficiency and effectiveness of material and money flow management in the supply

chain:

Q11A: Are supply chain material flows efficiently and effectively managed? Q11B: Are supply chain money flows efficiently and effectively managed?

Information Flows

The first question below in this section is analogous to Q11A and Q11B above but

relates specifically to the efficiency and effectiveness of information flow management

in the supply chain.

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Q12A: Are supply chain information flows efficiently and effectively managed?

As noted in section 2.10.4, recent years have seen rapid developments in the ICT used

to facilitate the efficient and effective management of information in the context of

SCM, thus raising the question:

Q12B: What ICT tools are used to support the management of supply chain

information flows?

5. Fundamental Four

As pointed out in section 2.11.1, the need to replace fragmentation with integration (as

advocated in Fundamental Two) and the holistic approach to flow management (as

advocated in Fundamental Three) often requires a re-appraisal of the way in which both

internal and external customer/supplier relationships are created and managed. The

following questions build directly on the questions asked earlier (in particular, Q7A,

Q7B, Q8A and Q8B) and deal specifically with internal (i.e. intra-company) and

external (i.e. inter-company) relationships:

Q13A: What is the level and nature of internal supply chain collaboration?

Q13B: What is the level and nature of external upstream (i.e. customer-side) collaboration?

Q13C: What is the level and nature of external downstream (i.e. supplier-side) collaboration?

It was noted in section 2.11.5 that supply chain relationships are in essence about

people, and that education and learning play a potentially pivotal role in this context.

This raises a further question:

Q13D: What is the role of people/learning in the context of supply chain

relationships? 6. Implications

Finally, there are a number of detailed questions which have been formulated, based

specifically on decomposing RQ4 (‘What practical measures could be implemented at

policy/supply chain/firm level to improve the level of effective SCM adoption?’) into its

three constituent elements. The work of Huber and Sweeney (2007) alluded to the need

for appropriate interventions to support the more widespread and appropriate adoption

of SCM practices.

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Q14A: What practical measures could be implemented at policy level to improve

the level of effective SCM adoption? Q14B: What practical measures could be implemented at supply chain level to

improve the level of effective SCM adoption? Q14C: What practical measures could be implemented at firm level to improve the

level of effective SCM adoption?

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APPENDIX 11: FINAL QUESTIONNAIRE

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APPENDIX 12: QUESTIONNAIRE COVER LETTER Dear We at NITL would be very grateful if you could take a few minutes to complete the questionnaire which can be found at:

http://www.sphinxonline.com/comptes/default.aspx The National Institute for Transport and Logistics (NITL) is Ireland's national 'centre of excellence' in logistics and supply chain management (SCM). We are involved in research, education, consultancy and awareness creation in the SCM and logistics fields. In all facets of our work, we collaborate closely with companies in all major sectors of the Irish economy, as well as with many Government departments and agencies. We in NITL believe that the application of SCM thinking has the potential to significantly improve competitive advantage thus allowing firms to prosper and the economy as a whole to recover in a sustainable way. This survey is being undertaken as part of NITL's ongoing research into SCM understanding and adoption in Ireland. It aims to establish the level of understanding of SCM, as well as the extent to which SCM is being adopted, in companies in Ireland. The survey is just one aspect of a wider research project that involves interviews, focus groups and case studies. The results will be used, amongst other things, to inform enterprise policy making in this area over the coming years. We would be grateful if you could complete the questionnaire by DD/MM/2010. It takes just a few minutes to complete and we would be very grateful if you could take this time to help us with this important work. We can of course guarantee you that all responses will be treated in strict confidence and we will be happy to provide you with a copy of the results once they become available. To acknowledge your support with this survey we will issue a free ticket to the next Logistics Ireland conference – Ireland’s premier SCM event - to 10% of respondents chosen at random. Thanks for your time and please do not hesitate to contact myself or any of my colleagues if we can be of any assistance. Regards, Edward Sweeney Director of Learning, NITL

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APPENDIX 13: ANALYSIS OF RESPONDENT DEMOGRAPHIC DA TA

This Appendix provides a detailed analysis of the linkages between various

demographic data collected in the quantitative survey. It focuses mainly on the

demographic factors used in the data analysis in section 6.11 – sector, firm size, firm

ownership and respondent background.

Figure 1 shows the link between sector and firm size as measured by number of

employees. The Χ2 test suggests that dependence is highly significant.


Figure 1: Sector and Firm Size

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The highly significant dependence is mainly due to the large number of small firms in

the retail trade (and the proportionately small number of large firms in this sector). The

other significant factor is the relatively large number of large firms in the food products,

beverages and tobacco sector.

Figure 2 shows the link between sector and firm ownership with the Χ2 test again

suggesting that dependence is highly significant.

p = <01%<01%<01%<01% ; chi2 = 76.3176.3176.3176.31 ; dof = 40404040 (VSVSVSVS) Dependence is highly significant.

Figure 2: Sector and Firm Ownership

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The highly significant dependence is mainly due to the large number of multinational

firms in the computer, electronic, optical and electrical sector (and the proportionately

small number of Irish firms in this sector). Similar, albeit less significant, situations

pertain in the chemical and pharmaceutical and information and communications

sectors. The other significant factor is the relatively large number of Irish firms in the

wholesale and retail trade.

Figure 3 shows the link between sector and respondent background with the Χ2 test

again suggesting that dependence is highly significant. A more detailed analysis of this

suggests that relatively large numbers of respondent backgrounds are prevalent in

particular sectors with the most significant as follows:

• Purchasing (including supplier management) in furniture and other

manufacturing and in the retail trade;

• Production/operations management in traditional sectors such as food products,

beverages and tobacco, textiles and wearing apparel, rubber and plastic products;

• Transport management in machinery and equipment not elsewhere classified and

the motor trade;

• Warehouse management in the wholesale trade; and,

• End-to-end SCM in technology-oriented sectors such as chemicals and

pharmaceuticals, computer, electronic, optical and electrical and information and

communications.

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p = 0.0.0.0.7%7%7%7% ; chi2 = 161.35161.35161.35161.35 ; dof = 120120120120 (VSVSVSVS) Dependence is highly significant.

Figure 3: Sector and Respondent Background

Figure 4 shows the relationship between firm size as measured by number of employees

and firm ownership. As is clearly shown in the factor map in Figure 5, the majority of

small firms are indigenous while the majority of large firms are local operations of

multinationals.


Figure 4: Firm Size and Ownership

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Figure 5: Factor Map - Firm Size and Ownership

Figures 6 and 7 show the relationship between, on the one had, firm size and firm

ownership, and, on the other hand, respondent background. The Χ2 tests reveal

dependences that are significant (S) but more detailed analysis – including factor map –

does not reveal anything of particular interest.


Figure 6: Firm Size and Respondent Background


Figure 7: Firm Ownership and Respondent Background

Documents

Implementation of Supply Chain Management Theory in